Smartphones 'to speed up cheque transactions'
27 December 2013
Posted by Satvir Bhullar
New plans have been unveiled by the Treasury to enable people to use their smartphone to make cheque deposits.
When the new technology becomes available, it will enable a picture of a cheque to be sent to a bank via smartphone, reducing the amount of time it takes to process payment from six days to two.
The move is designed to aid consumers and small businesses. Some 25 per cent of payments made by small businesses were by cheque in 2012.
Using a smartphone to send the images means a hard copy of the cheque does not have to be present during every phase of the transaction, making the process more efficient.
The technology has already been made available in the United States, where it is widely used. Barclays plans to introduce the new system in this country next year.
Nearly ten per cent of all payments were made by cheque last year. It is believed to be one of the most secure means of transaction, particularly by post.
Customers will still be able to use the current technology to deposit cheques at their local branch if they wish.
Financial Secretary to the Treasury Sajid Javid said: "We want to see more innovation so that customers see the benefits of new technologies. That is why we're creating a new payments regulator and why we are going to consult on speeding up the cheque clearing process … We want cheques to have a crucial role in the ongoing success of the UK."
The proposals were welcomed by John Allan, national chairman of the Federation of Small Businesses, who claimed the reforms would make it easier to do business in areas where branches of banks are closing.
Paper financial transactions could soon become a rarity. Earlier this month the Bank of England announced the UK's banknotes would be printed on polymer - a thin, plastic film - beginning in 2016. The new notes will be more secure, cleaner and more durable - as well as being more environmentally friendly.