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Insight

Banks to accept smartphone photos? Cheque

02/01/2014
The Treasury recently confirmed that British banks are set to accept photos of cheques sent by smartphone which will cut the processing time for cheques to clear from six to two days.  In the UK, the The Treasury recently confirmed that British banks are set to accept photos of cheques sent by smartphone which will cut the processing time for cheques to clear from six to two days. 

In the UK, the law currently states that the bank has a legal right to demand to physically see the cheque, especially if it is from a different bank, before it decides to honour it.   

The change in the law will mean that consumers will be able to go to banks with photographs of cheques in a similar manner to the way that plane tickets can now be printouts of emails or read from phone screens.  Speeding up cheque payments into business accounts in particular should encourage businesses to accept cheques as a method of payment.  Barclays is planning to launch a pilot programme for paying in cheques via phone from April 2014 and hopes to launch a service for all its customers later in the year. 

This cheque clearing technology is already being used in the USA.  JP Morgan introduced it in 2010 and was then followed by Citibank and Bank of America.  A new law 21 was passed there to enable banks to process cheques electronically. 

Experts have predicted that this technology will create a very secure experience for customers as photos would not be stored on the phone itself so there would be no security risk if a phone was stolen.  

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