Changes to cheque clearing for business banking
New legislation to improve cheque clearing times will be introduced to the UK banking industry from 30 October 2017.
Currently paper cheques are physically exchanged between banks. From 30 October 2017, Individual Banks will gradually begin to capture and exchange digital images of cheques with other banks.
The time it takes to clear a cheque after it has been paid in is known as the cheque clearing cycle. Cheques using the digital capture method will clear quicker – on the next business day instead of taking six business days, so the funds will be in your account sooner.
You will still be able to pay in your cheques as you do today. Over the next year Banks will introduce quicker and more convenient ways of depositing cheques.
By the end of 2018, the current six business day clearing process will be withdrawn altogether and all cheques will be cleared on the next business day. A quicker clearing time also means money could leave your account earlier if you have written a cheque.
A long overdue development but a very positive one.