Cheque clearing system is due to speed up

This is due to the introduction of the Cheque Image Clearing System (CICS), which is being gradually rolled out from 30 October 2017.

Initially, the volume of cheques going through the new system will be small and most customers won’t notice any change to how quickly their cheques clear.

In order for banks and building societies to upgrade their systems to accommodate CICS, the current paper-based cheque clearing system will run in parallel with the new image-based one. Banks and building societies should advise their customers of their individual roll-out plans.

One of the main benefits of an image-based system is that the cheque clearing process will be faster. If a customer pays in a cheque on a weekday (Monday to Friday), they will be able to withdraw the funds by 23.59 on the next weekday (excluding bank holidays) at the latest.

Cheques can still be paid into banks or building societies in the usual way – by post, in a branch or at an ATM. But it can also now be paid in via an image of the cheque by using a secure mobile banking app on your smartphone or tablet.

For business and charity customers, some banks may provide desktop scanners linked to their online bank account. This will help speed things up particularly if paying in large numbers of cheques.

This new image-based system also means that the money will leave the account of the writer of the cheque faster too, especially if the cheque recipient pays it in to their account via a smartphone, tablet or scanner.

The new system will process sterling cheques, postal orders, travellers’ cheques, bankers’ drafts, dividend cheques and bill payments drawn on UK banks and paid into a UK account in the UK, but not foreign currency cheques.

Although the use of cheques has dramatically diminished from four billion in 1990, there were 477 million cheques written in the UK in 2016.

The cheque is now 358 years old. The first known cheque was issued on 16 February 1659 by Messrs Morris and Clayton, scriveners and bankers based in the City of London, for £400 (about £43,000 today) made payable to a Mr Delboe and signed by Nicholas Vanacker.