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UK Politics

Treasury unveils ‘smart’ way to cash a cheque: Take a photo on your phone and mail to the bank


People will be able to take pictures of cheques on their smartphones and send them to their bank to receive the money early, under a Treasury plan announced today.

The idea could give individuals and businesses access to payments by cheque in two days instead of six days as at present. It could also safeguard the long-term future of the cheque in the age of internet banking.

Legislation allowing banks to process images rather than paper is one option being considered by the Treasury. The technology is already widely used in the US and Barclays Bank plans to experiment with mobile cheque depositing in the UK in the new year. The change could take effect by next Christmas.

Customers without smartphones would be able to use similar technology at cashpoints or bank branches or continue to pay in paper cheques if they wished.

“Cheque imaging” does not require a hard copy of the cheque at every stage of the paying-in process. Saving the time spent transferring paper copies between different banks and central clearing depots means it also cuts costs.

Cheques with a value of almost £840bn were processed in the UK in 2012 – 10 per cent of all payments by individuals.

Some 23 million cheques were used as gifts because they are still the most trusted method of sending money through the post. Businesses accounted for more than 370 million cheque transactions and a quarter of payments made by small businesses were by cheque.

Sajid Javid, the Financial Secretary to the Treasury, said: “This Government is determined to create a banking sector that works for consumers and serves businesses. We want to see more innovation so that customers see the benefits of new technologies.”

John Allan, chairman of the  Federation of Small Businesses, said: “Speeding up cheque payments into business accounts is to be welcomed as many find the current process frustratingly slow.”

The Treasury also announced a plan to boost lending to small firms by making it easier for the new “challenger” banks that are taking on the “Big Four” high street names to check the creditworthiness of potential business customers.

It will consult on new rules requiring banks to share their credit data on small and medium sized enterprises through credit reference agencies. At present, the Big Four banks control 85 per cent of lending to these firms.