On 25 June 2014, HM Treasury published a summary of responses to its March 2014 consultation on proposed legislation to allow for the introduction of cheque imaging in the UK (including Government feedback on the responses). The summary indicates where its final policy has been adjusted in order to take the views of respondents into account. Cheque imaging helps to speed up cheque clearing times by making it possible to send an electronic image (as opposed to paper version) of the cheque for clearing. It is already established in the USA, France and parts of Asia.

The report shows that:

  • there was widespread support for the proposal to legislate for cheque imaging
  • in view of the consumer benefits of consistency and certainty, respondents prefer the option of the industry moving as one to a new cheque imaging infrastructure
  • the government has considered the views put forward on the subject of liability and the legislation will enable HM Treasury to make regulations in due course, placing liability on the payee's bank for designated types of fraud and error
  • the government aims to ensure that UK payment services meet the current and future needs of consumers, business and other users. A related HM Treasury press release advises that customers will continue to be able to deposit cheques at branches, cash machines, Post Offices or by post, but banks will also be able to offer the option of paying in cheques by smartphone, tablets or other technology.

The Payments Council also commented on the outcome of HM Treasury’s consultation, stating, “the results from the government’s consultation today clearly show the demand for the additional convenience of paying in cheques by image and quicker processing of cheques.”

Steven Roberts, Director for Transformation at Barclays Bank - the first UK bank to pilot cheque imaging - commented: “We welcome today’s response by HM Treasury to legislate for image-based cheque processing. This is an opportunity to move cheques into the 21st century, to reduce costs and make banking easier and more convenient for customers. We look forward to working closely with other banks, industry groups and the Treasury to make this a universal nationwide service as quickly as possible, so that all customers with a cheque to deposit can do so through their phone, tablet, branch or self-service device, regardless of who they bank with.”

What this means for you

The government will support the introduction of cheque imaging in the UK by legislating a suitable framework in the Small Business, Enterprise and Employment Bill 2014-15, which received its first reading in the House of Commons on 25 June 2014. In Chapter 5 of the document, HM Treasury advises that the timings for industry implementation of the measures are currently being finalised. The government is working with the industry to identify the most appropriate date for implementation, and will bring the new legislation into force to meet the agreed timetable