Cheque imaging launched on 30th October 2017 on a phased roll out basis, Very few cheques will be processed through the new Image Clearing System to begin with. The vast majority of cheque users won’t experience any of their cheques being processed through the new system for a number of months.
During the phased roll-out customers will not be able to choose which system is used to clear their cheques. Banks and building societies are now working towards clearing all cheques via the Image Clearing System and the rollout of this new system is continuing in 2019.
For more information on whether a cheque that you pay in will clear through the new system or the existing paper system contact your bank or building society.
Paper clearing process
Cheque clearing through the paper clearings can be likened to an efficient factory process. During the day and night, shift staff work around the clock to ensure that all the cheques that are paid in every working day (Monday to Friday, excluding bank holidays) keep to the 2-4-6 cheque clearing timescales, wherever in the UK the cheque is paid in.
When your cheque is cleared through the paper clearings 2-4-6 timescales help provide clarity on:
• When your account will start to earn interest on the money or when any overdraft will be reduced.
• When you will be able to withdraw the money.
• When the money has safely cleared with no chance of the cheque being returned unpaid (i.e. ‘bouncing’).
So, when the cheque you receive is cleared through the paper clearings :
• You pay it into your bank on a working day.
• Your bank sends your cheque to its clearing centre where it is sorted and cheque data is created.
• This data is sent electronically to the bank of the person who wrote the cheque (the payer’s bank) and the physical cheque is sent to an Exchange Centre, which ensures that your cheque is sent to the correct payer’s bank.
• The payer’s bank checks for fraud and whether the payer has enough money in their account. If all is okay it sends the money to your bank, which puts it into your account.
• After two working days you start to receive interest on the funds from the cheque.
• After four working days you can withdraw the money.
• After six working days the cheque can’t bounce and the money is yours to keep.
The new cheque clearing process in the U.K..