Banking customers will soon be able to pay in cheques just by taking a photo of them, it has been announced.
The use of digital imaging technology was included as part of the government’s Small Business, Enterprise and Employment Bill following a successful trial by Barclays earlier this year.
Going forward, customers will be allowed to deposit money into their accounts or pay people using a mobile phone picture of a cheque. The move means that customers will see deposits appear instantly, and cheques written out to pay bills or people should also clear within minutes.
Implementing the technology should allow businesses to process cheque payments much faster in the future, cutting the time taken for a cheque to clear from six days to two.
Digital imaging would also cut costs for banks, which could save hundreds of millions by eliminating physical paper resources, and be more convenient for customers, with Barclays claiming that UK customers fail to pay in up to £300m of cheques each year.
According to the Treasury, cheques remain a popular method of payment in the UK, with almost £840bn worth being processed in 2012, which accounted for around 10% of all payments in the UK that year. More than nine in ten businesses continue to use cheque payments, it added, although the volume of payments processed had begun to decline in recent years.
Along with Barclays’ trial, digital imaging of cheques is already widely used by banks in other countries, including the USA, France and parts of Asia.
The Treasury has not yet confirmed details of the scheme but is keen to introduce it as soon as possible.
"Key to the government’s long term economic plan is building stronger and safer banks that customers can trust," said Andrea Leadsom MP, economic secretary to the Treasury.
"We also want Britain’s consumers and businesses to have far greater choice in banking services and that’s why the legislation being published today is so important."
