The start of the phased roll-out of a new, image-based cheque clearing system that speeds up cheque processing significantly for customers across the UK began on 30th October 2017.
Very low volumes to begin with
Initially, the volume of cheques going through the new system was small and the vast majority of customers did not notice any change to how quickly their cheques clear. However, over time, increasing numbers of cheques are being cleared using the new system and more and more customers are benefiting from the faster timescale. Banks and building societies are working towards clearing all cheques to the faster timescale, via the Image Clearing System, and the rollout of this new system is continuing in 2019.
Two clearing systems running in parallel
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 Clearing 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.
Cheques will clear faster
One of the main benefits of an image-based system is that the cheque clearing process will be speeded up. If a customer pays in a cheque on a weekday (before their bank or building society’s advertised cut-off time) they will be able to withdraw the funds by 23.59 on the next weekday (bank holidays excluded and provided the cheque doesn’t bounce). However, 23:59 will be the latest timescale that banks and building societies will be working to and some may allow their customers to access their funds earlier than this.
The advertised cut-off time will vary from bank to bank and building society to building society and according to how the cheque is paid in - for example: over the counter, by post, through an ATM or by mobile banking app or desktop scanner linked to online banking.
This timescale applies to all banks and building societies, wherever they are based in the UK. If a customer pays in a cheque in at a Post Office, the above timescale will increase by at least one additional day. This is because the Post Office is not a bank and the cheque has to be sent by the Post Office to the customer’s bank. Once received by the customer’s bank the cheque will then be processed in line with the image-based cheque clearing timescales highlighted above.
Nobody has to do anything differently if they don’t want to
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.
Cheque imaging is also about providing more choice, and it means that some banks and building societies might offer their personal customers the additional option of paying in an image of the cheque – using a cheque deposit option in their mobile banking app - rather than going to a branch 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, as digital images, large numbers of cheques that they receive.
Money arrives/leaves your account sooner
Introduction of the new process means that when a cheque is cleared via the image-based system, not only will the recipient receive the money in their account more quickly; the money will leave the account of the person, business or charity that wrote the cheque to the faster timescale too, especially if the cheque recipient pays it in to their account via a smartphone, tablet or scanner.