Brave New World for Cheque Payments?

Change is afoot in the world of payments. The UK Treasury is consulting on an alteration to the regulatory and strategy setting regime for payments, and it seems likely that an OffPay-type body will emerge.

Technology, of course, is at the heart of all payments, and since the reversal of the Payments Council’s decision to close the centralised cheque clearings, the application of technology may indeed make a difference to the way cheques are cleared in the UK. No one disputes the continuing decline of the use of cheques, either personal or in business, but plenty of opinions exist about making this payment method a more efficient, less long-winded and ultimately more user-friendly way of getting money from one account to another.

One such application is the use of document image capture, turning a paper payment instrument into an electronic instruction for more timely clearing. A recent whitepaper from Digital Check Technology highlighted the use of image-based cheque processing in countries such as the US, Mexico, Malaysia, and more recently Nigeria and Ghana, to enable funds to be cleared on the same-or next-day.

This occurs, however, not without the threat of fraud once the original document is not available to the paying bank prior to the funds being switched. The whitepaper interestingly points towards the use of ultra violet features, invisible to the naked eye, in the design process that can be machine read, at speed, to help prevent some of the counterfeit and altered cheques entering the system.

Perhaps there is a brave new world for the traditional, old world of cheques.