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Cheque imaging: will speed up cheque processing significantly

Last Edit: 08/11/18

In 2017, the Cheque and Credit Clearing Company announced the roll-out of cheque imaging, which is projected to increase the speed cheques are cleared from 6 days to 2 days. The purpose of the new image-based clearing system is to improve the customer experience -- due to the new faster clearing timescale -- and to allow more banks to participate in the system.

The date that cheque imaging will begin is the 30th of October 2017. Only a small amount of cheques will initially be processed by the new image based cheque clearing system; therefore, most customers will not notice a difference to begin with. The plan is, according to the Cheque and Credit Clearing Company, a phased roll out, that as time progresses, will result in more and more cheques being processed using the new image based cheque clearing system, with the goal that eventually all cheques will be cleared through the new system (by the end of 2019). Whether this projection is over optimist, only time will tell.

For those of you who are unaware, the Cheque and Credit Clearing Company has managed the cheque clearing system in England since 1985, and in Scotland and Wales since 1996. Northern Ireland's cheque clearing system is still managed by the Belfast Bankers' Clearing Company. The Cheque and Credit Clearing Company is an industry body for UK banking, and is membership-based; for organisations that offer cheque services to their customers. The current members of the Paper Clearing System are: HSBC, Clydesdale Bank, Lloyds Bank, Nationwide Building Society, RBS, Natwest, Santander, and the Co-operative Bank. The members of the new image-based cheque clearing system (ICS) are separated into two types of participation: settlement or switch.

As of July 2018, the Settlement and Switch participants (ICS) are: The Access Bank UK Limited, AIB Group (UK), Bank of Ireland (UK) plc, Barclays Bank PLC, Clydesdale Bank PLC, The Co-operative Bank plc, Habib Bank Zurich plc, HSBC UK Bank PLC, Lloyds Bank plc, Nationwide Building Society, National Westminster Bank Plc, Northern Bank Limited, The Royal Bank of Scotland plc, Santander UK plc, TSB Bank plc, Turkish Bank (UK) Ltd and Virgin Money plc. All of the banks and building societies listed are members of both the Settlement and Switch parts of the image based clearing system; there does not appear to any companies who are only Settlement participants or Switch participants.

In conclusion, since the 30th of October 2017, England, Scotland and Wales has had two cheque clearing systems running in parallel: the paper clearing system (six days), and the new image clearing system (two days). The plan is, that eventually all cheques will be cleared via the image clearing system, meaning that money will arrive and leave bank accounts quicker. This is important to note, because some customers may be unaware of the new image based clearing system, and may think they have more time than they will have to cancel a cheque. How cheques are written, given and posted will remain the same, the new system only affects how banks process cheques.