New system set to speed up how long it takes for cheques to clear
The forthcoming introduction of an image-based cheque clearing system will significantly reduce the processing time for cheque users across the UK.
The move is away from paper-processing, whereby a cheque itself has to be sent to and from banks and branches, to image-based processing whereby a photograph of a cheque can be passed between them instead.
The new way of working should see cheque clearing times reduced dramatically from the current standard six working days.
However the latest research by the Cheque and Credit Clearing Company (C&CCC) reveals only 30% of charities and 20% of businesses are aware that cheque imaging is coming – and soon.
Very soon in fact.
A phased roll-out of the new system begins on 30 October 2017, with the introduction set to be complete to all banks and building societies in the second half of 2018.
During the switchover two clearing systems will operate in parallel. This means some cheques will continue to take up to six working days if processed through the old paper-based system, while those processed using the new image system will clear more quickly.
How fast is fast?
According to the C&CCC, with the new system, if a customer pays in a cheque on a weekday they will be able to withdraw the funds by 23.59 on the next weekday (excluding bank holidays) at the latest.
This means, not only will the money arrive into the recipient’s account more quickly, it will also leave the account of the person or business that wrote the cheque faster too.
The change in processing system does not alter the way customers write and give cheques, and recipients will still be able to pay in cheques in the normal ways.
The survey reveals this continuation of regular customer practice is particularly important to charities, with 29% saying they receive half or more of their donations by cheque.
Other plus points
As well as time saving, the new image-based system could see some banks and building societies offering customers the option of paying-in an image of a cheque by using a secure mobile banking app on their smartphone or tablet.
This means, in the future, customers could pay in cheques remotely rather than having to go to a bank to pay it in.