Phased roll-out of faster cheque clearing system has begun

07 November 2017

The phased roll-out of a new, image-based cheque clearing system will speed up cheque processing significantly for customers across the UK.

The roll-out began on 30 October by the Cheque and Credit Clearing Company (CCCC). Cheques processed via the new system will mean that 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. Many banks and building societies are likely to allow access to the funds earlier than this.

Initially, the volume of cheques going through the new system will be small and the vast majority of customers will not notice any change to how quickly their cheques clear. However, over time, increasing numbers of cheques will be cleared using the new system and more and more customers will benefit from the faster timescale.

At some stage in the summer of 2018, all of the UK’s banks and building societies will clear all cheques via the image-based system to the faster timescale. The precise date as to when this will happen will be announced by the industry in due course.

Until then, two clearing systems will operate in parallel, which means that some cheques that customers write or pay-in will be cleared more quickly via the image system, and some will clear to the existing, six weekday timescale through the current, paper-based system. Banks and building societies will be advising their customers of their individual roll-out plans as appropriate.

Customers will still write cheques as they do today and give or post them to recipients in exactly the same way as they always have. Cheque recipients will still be able to pay in cheques in the normal variety of ways, such as at a bank or building society, by post or at an ATM. This continuation of regular customer practice is particularly important for charities, which receive many donations via this payment method; and for any other people that may prefer to carry on using cheques in exactly the same way as they always have.

Cheque imaging is also about providing more choice, and it means that some banks and building societies may offer their personal customers the additional option of paying-in an image of the cheque - by using a secure mobile banking app on their smartphone or tablet - rather than having to go to a bank to pay it in. For business and charity customers banks may provide desktop scanners linked to their online bank account, allowing them to pay in any cheques that they receive as digital images.

For more information about how the new process will work, visit the Cheque and Credit Clearing Company (CCCC).

CIPP comment

Government is consulting on legislation for two measures to support the introduction of the Image Clearing System (ICS) for cheques.

The first concerns the use of cheques as evidence of payment. The proposed legislation will ensure that customers can receive a copy of their cheque to use as evidence of payment under ICS, in place of the original cheque under the old system.

The second concerns compensation. Government is consulting on legislation as a back stop to ensure that customers are compensated in the event that they incur a loss in connection with ICS.

The consultation closes on 1 December 2017.