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The earliest known cheque in the Barclays archives dates from 1723, sent by ‘your loyal servant Edward Smythe’, to his banker ‘att the three squirrels in Fleet Street’ – our oldest branch that is still serving customers today in the City of London.
Cheques have come a long way from the simple scraps of paper that were seen in the 18th century, but the underlying principle has not much changed. The use of cheques peaked almost 30 years ago in 1990, since when there has been a steady decline as card and digital payments have increased rapidly. With nearly half a billion written last year, however, they are still an important payment method for many, particularly businesses and charities.
Currently, when you receive a cheque you deposit it at a branch or using one of the deposit services that Barclays offers its corporate clients. The cheque is then sorted, along with thousands of others, and taken to a local processing centre, in one of 330 vans.
It might even take one of 11 flights a day that deliver cheques right across the country.
Then, when the cheque is verified, the money is transferred. The whole process can take up to 6 working days, from start to finish.
Since the decision to phase out cheques was reversed a few years ago, Barclays has been lobbying the industry and government to help bring cheques into the 21st century. The very physical nature of a cheque and the fact that it has to be seen and stored by your bank makes evolution difficult, but a team at Barclays had the idea of replacing the physical record with an image. Last year the legislation governing cheques changed and this opened the way for cheque imaging.
The new legislation will mean that cheque imaging can be used across the whole banking network and cheques will clear faster. When cheque imaging is introduced, if you pay in a cheque on a weekday, the funds will be yours from 23:59 the following weekday; a process that previously took up to six days.
It also opens up exciting possibilities for giving you more choice in how you pay in cheques. For the past three years, personal and business banking customers of Barclays have had the opportunity to use our Barclays Mobile Banking app to deposit Barclays cheques using the camera on their smartphone. Over 175,000 customers are taking part in the pilot; they simply photograph the front and back of the cheque, and the balance is deposited within 48 hours at the latest.
Barclays is considering how to use the new technology to further benefit its corporate clients and we’ll be communicating more in the future.
Cheque imaging will be introduced gradually from the end of October 2017, and by the end of 2018 all cheques will be processed as images and clear faster. The move to cheque imaging entails making significant infrastructure and systems changes which means initially, while we embed the changes, you are unlikely to notice much difference as very few cheques will be processed as images and clear faster. We will keep you informed of developments. In the interim, existing processes for clearing cheques will also be used.
If you would like to find out more about cheque imaging and how your business could take advantage of the changes that are being introduced from October, contact your relationship manager.
Your eligible deposits with Barclays Bank PLC are protected up to the FSCS compensation limit by the Financial Services Compensation Scheme, the UK's deposit guarantee scheme. This limit is applied to the total of any deposits you have with the following: Barclays, Barclays Corporate Banking, Barclays Investment Bank, Barclays Private Banking and Barclaycard. Any total deposits you hold above the limit between these brands are unlikely to be covered. For further information visit www.fscs.org.uk^ (opens in a new window).
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