UK banks and building societies are to launch a new image-based cheque clearing system, making it possible for mobile banking users to pay-in an image of a cheque via a secure mobile banking app on their smartphone or tablet, rather than having to go to a bank to pay it in.
The industry-wide system will start rolling out this October. By the end of next year, all of the UK’s banks and building societies will have moved over to the image-based system.
Some banks already allow cheques to be paid in via mobile banking, but only when the cheque is from another customer of the same bank. Under the new system, banks will be able to accept and clear cheque images drawn from other banks.
As well as enabling customers to pay-in an image of a cheque, the new system will speed up cheque processing for all bank customers.
According to the Cheque and Credit Clearing Company (C&CCC), the organisation that manages the cheque clearing system, the current UK sterling cheque clearing process involves the actual paper cheques being physically transported around the country. After paying in a cheque, it takes up to two weekdays before the customer earns interest, four weekdays before they can withdraw the money, and six weekdays before they can be absolutely certain that it won’t be returned unpaid.
Under the new system, customers will be able to withdraw the funds – and be certain that the cheque won’t be returned unpaid – by the end of the next weekday after paying in a cheque.
Cheque recipients will still be able to pay in cheques in the normal ways, such as at a bank or building society, by post or at an ATM.