CIPP survey on 'cheque imaging' consultation
25 March 2014
Cheques continue to form a vital part of the British payments landscape. Nearly £840 billion of cheques were processed in 2012, accounting for ten percent of all payments made by individuals. While there is a decline in cheque volumes, over nine in ten businesses and other organisations continue to use them. Cheques are used by sole traders, other micro businesses and small businesses to make over a fifth of their outgoing payments. For many smaller charities and other voluntary organisations, cheques are the primary method of payment.
The government has already taken a number of steps to ensure that the banking industry provides individuals and businesses with a choice of payment methods that adequately serve their needs.
In 2009 the Payments Council, the industry body responsible for setting payments strategy, announced a target date of 2018 for closure of the central cheque clearing system. Many stakeholders felt this decision would lead, in practice, to the abolition of cheques. This decision caused considerable anxiety for many people in the UK, particularly those who are elderly, housebound or rely on cheques to conduct their day to day business (such as many charities, clubs and small businesses). Following pressure from the Treasury Select Committee (TSC) and the government, the Payments Council reversed its decision and the banks undertook to provide cheque services for as long as customers needed them.
The government is now taking a further step to support ongoing innovation in UK payments and secure the future of cheques. The government is setting out proposed legislation which will allow for the introduction of ‘cheque imaging’, an innovation that speeds up cheque clearing times by sending a digital image of the cheque for clearing, rather than the piece of paper itself.
Cheque imaging will provide greater opportunities for banks and building societies to innovate and provide new services. For example, customers may be able to take a photograph of their cheque on their smartphone and pay it in electronically via their bank’s mobile banking app. Customers without smartphones will be able to deposit their cheques as usual at bank branches or cash machines, where a cheque can be scanned and the image transmitted electronically.
The CIPP policy team have created a short survey to understand if you still use cheques, in what circumstances, and whether these proposals would be of benefit to you in the future.