New technology to be introduced later this year will allow cheques paid into bank accounts to be cleared within one working day.
The Cheque and Credit Clearing Company (C&CCC) – the organisation that manages the cheque-clearing system – claims that a new image clearing system will ‘revolutionise how cheques are cleared in the UK’.
Instead of the current paper-based system, whereby the actual paper cheque is transported around the country to be cleared, which can take up to six days, a digital image of the cheque will be used instead. This should significantly speed up the process.
The changes will be phased in from October 2017, although it won’t be until the second half of 2018 before all UK banks and building societies are able to offer the new service.
James Radford, Chief Executive of the C&CCC, said: ‘These changes will put cheques firmly in the 21st century, delivering real and important benefits for the many individuals, charities and businesses that regularly use cheques.
‘Not only will cheques clear faster but banks and building societies may offer their customers the option of paying in an image of a cheque rather than the paper cheque itself.’
Cheque use has declined in recent years, especially with the growth in internet bank transfers. The banking industry has previously expressed a desire to phase them out entirely by 2018. However, they remain an important method of payment, with some 477 million cheques written in the UK in 2016.