People will be able to pay in a cheque by sending a smartphone image of it to their bank under Government proposals to bolster the long-term future of the payment method.
The Government described cheques as a “crucial” part of the British payments landscape and plans to bring them into the modern age could cut the length of time it takes to process a cheque payment from six days currently to just two days.
Barclays plans to pilot technology to enable people to scan cheques using a smartphone or tablet early next year, with the full launch of cheque imaging on its mobile banking app pencilled in for the second half of 2014. Barclays’ Mobile Banking App is for use by Barclays’ customers only.
Plans to kill off cheques from 2018 were dropped two years ago after the UK Payments Council faced an outcry from small businesses, charities and pensioner lobby groups, who said the needs of millions of vulnerable people were being ignored.
Next year, the Government will consult on introducing legislation to speed up cheque payments and help make sure the cheque remains fit for 21st century needs.
It will consider the possibility of making the process faster by enabling banks to use images rather than paper as they do now. This technology is already widely used in the United States.
“Cheque imaging” does not require a hard copy of the cheque to be present at every stage of the paying-in process. That means that time which would have been spent transferring it between different banks and central clearing depots is cut as well as the overall cost.
Under the proposals, people without smartphones will be able to use similar technology at cashpoints or branches or, if they want, to continue paying in paper cheques as they do now.
Despite the increasing popularity of new technologies such as online banking and mobile payments, nearly £840bn worth of cheques was processed last year – accounting for 10 per cent of all payments made by individuals.