Cheque payments to get faster
Although you might think the only people who use cheques anymore are nonagenarians and milkmen, good news is on the horizon for those getting paid by the antiquated paper form. It’s going to get faster.
Currently, cheque payments take at least three working days to clear when paid into an account but the government has now unveiled detailed plans to modernise cheque payments, “reinforcing their relevance in 21st century Britain.” The changes will make a “real difference” to cheque users, reducing the time it takes for a cheque to clear to “as little as two days.” How underwhelming.
The government is proposing legislating for “cheque imaging” which will speed up cheque clearing times and give customers greater convenience and choice in how they deposit cheques. The reforms will enable banks to clear a certified, digital image of a cheque instead of a traditional paper cheque. A Treasury statement said that this will “secure the future of the cheque as a reliable method of payment in the UK, using proven technology which has been in operation in the United States for 10 years.”
In addition to reducing the clearing time by a day, the new technology will allow banks to offer the option of paying in cheques via smartphone or tablet. Additionally, banks may be able to offer later last times of deposit to customers if they no longer require couriers to collect paper cheques daily from branches.
And no matter what you think, cheques are apparently “crucial” to the “British payments landscape”. Treasury figures show that nearly £840 billion of cheques were processed in 2012 – accounting for 10% of all payments made by individuals. Small businesses, such as sole traders and other micro businesses make over a fifth of their outgoing payments in cheques and nearly a third of smaller charities receive over 75% of their income by cheque.
John Allan, National Chairman, Federation of Small Businesses, said:
“Many of our members, and their customers, still rely on cheques so will be pleased with the investment and innovation to ensure their continued use. Speeding up cheque payments into business accounts will help boost a firms’ cash-flow as many find the current process frustratingly slow. Using smart phones is an interesting idea which should allow firms in areas, particularly where bank branches are closing, to be able to accept cheques as a method of payment.”