The C&CCC provides a centrally-managed, distributed payment processing system through third party suppliers. The company’s primary concern is to ensure that the central processing system is secure, reliable and robust, and there are several layers of contingency to ensure that exchange and settlement take place on every clearing day.

Exchange centres
C&CCC contracts with third party service providers for the provision of a daily cheque and credit paper clearing exchange service for normal banking business days at secure premises. There are two exchange centres, one in central England and one in Scotland. The exchange centres are used by the cheque clearing, credit clearing and euro clearing systems.

Data transfer network
The C&CCC’s central network infrastructure is called the Inter-Bank Data Exchange (IBDE) network. It allows the transfer of digital data on cheques and is provided by a telecoms supplier.  It is a secure network to which only members of the cheque clearing system have access. Continuity of service is of paramount importance and, to ensure this, the network service provider monitors the performance of the network to each member’s end-point at intervals of a few minutes throughout the whole day. There is also a proactive fault management service.

All cheque data passing across the IBDE network or between members using the same outsourced processor must be encrypted. It must also be signed with a digital signature for authentication purposes so that the receiving bank can verify that the data has not been tampered with as it passed across the network. The encryption and authentication security sub-system is provided by a third party software supplier and is managed by the C&CCC.

Settlement System
Members input their bilateral pay and charge figures onto a secure browser-based application, which is hosted by a third party supplier, using internet connectivity.  Reconciliation of the figures, to eliminate any discrepancies between the members’ calculations, is automated and, after all the figures are agreed, the software calculates the multilateral net figures that must be paid to or received from each member bank.

The Settlement Service Provider (SSP) for the sterling clearing is the Bank of England. SWIFT messaging is used to transmit advice of the multilateral net settlement figures directly into RTGS (Real Time Gross Settlement System) at the Bank of England for final settlement.

The Bank of England pre-notifies the settlement obligation to the treasury department of each member bank so that they can make sure sufficient funds are available for settlement purposes.

The C&CCC is the SSP for euro clearings, and SWIFT messaging is used to transmit advice of the multilateral net settlement figures to members' treasury departments. An account at a commercial bank is used for the related settlement payments.

Unpaids courier service
The C&CCC provides, through a third party supplier, a dedicated courier service for the collection and delivery of unpaid cheques to members of the C&CCC and to members of the Belfast Bankers’ Clearing Company. Items to be returned are placed in uniquely numbered plastic bags, called polylopes. Bar code scanning of the polylopes takes place at each of the collection and delivery points around the UK and at the central hub.  This enables the banks to track the progress of the unpaid cheques, rather like a recorded letter or parcel, as they are couriered, via the central hub, to their intended destination the next day.

The implementation of this service in November 2007 has meant that banks across the UK can be sure that they get back unpaid cheques on a timely basis so that they can meet the 2-4-6 cheque clearing timescales. Previously banks relied on the delivery of unpaid cheques by post.