UK begins roll out of cheque imaging

If a unique QrCode is printed on the Business Cheques it can be deposited by a simple scan and deposit with the appropriate application.

This story would seem to be news only because it has taken the UK so long to "get it done".  As to needing Qr Codes to deposit checks, really?  US retail banks have been allowing that via simple check photos for a couple of years without requiring information beyond what's already standard on US checks.  And the UK is supposed to be a hotbed of FinTech development, really?

Banks issue blank cheques to business customers who write the amount and beneficiary name on individual cheques later. Who will print the QR code that's beneficiary-specific?

Most enterprises large and small print out cheques directly from their accounting software these days rather than writing them out by hand. This means they can print a QR code if that is required to automatically identify the beneficiary.

When somebody says "I'll write a cheque", it doesn't mean only "write by hand". It's a metaphor for filling the cheque, whether in wet ink or via printer.

With that out of the way, a payer that prints a cheque needs only to know the payee's name. Not having to collect, store and process the payee's account number, sort code, etc. is the major advantage of cheque. What QR code can it print with just the payee's name? With whatever QR code that it can print with just the payee's name, how will the payee be able to use a smartphone QR code scanner to deposit that cheque into their bank account? 

In an era when customers really want frictionless payments and faster payments, is cheque imaging really required? Yes, it purportedly reduces processing from 6 working days to 1 day; but the customer wants payments to be made immediately !!

@AnirudhRaghavendra: 

Cheque imaging is required because cheques are still around.

And why are cheques still around?

Part of the answer lies in your question. 

1. Next to cash, cheque is the most frictionless method of payment.
2. If customers really want frictionless and realtime payments, cash can't be beaten. As DB Research noted, cash is the only form of realtime payment that accomplishes transfer of value between payor and payee without any dependency on bank, hardware, software, network, battery, and other third parties.
3. Personally, I need to make a payment on 7th of every month and another payment on 10th of every month. There's no way I can guarantee availability of server, Internet or me on those days for making a realtime payment via RTGS/IMPS. So, I schedule them in advance via NEFT. Do I care for realtime payments? No.
4. During the implementation of FPS for a Top 5 UK Bank, we predicted that FPS would kill BACS within 2-3 years of launch of FPS in 2008. Nothing like that happened. Instead, UK customers didn't care too much for realtime payments; BACS volumes grew steadily and reached a peak a couple of years ago.

I see a growing belief that realtime payments is merely a hygiene factor.

Don't forget - the UK banks tried to get rid of cheques a few years ago and the backlash from politicians, charities and representatives of older people was massive - cheque imaging is a response to that backlash in the UK and a way for banks to reduce costs and environmental impacts associated with moving huge volumes of paper around the country.

Yes, we're all real time payment geeks on here but you need to think about all banking customers - not just tech savvy Monzo using millenials.  There are many customers who like to use cheques as a secure way to exchange value (without the danger associated with carrying lots of cash) - there are also lots of businesses (such as kids clubs, window cleaners, etc, etc) who like to recieve cheques as opposed to setting up with gocardless, izettle, etc (often because it's cheaper for them). 

Despite being a payments geek myself I find my family needing a new chequebook every year for the reasons stated above.

So lets get some perspective, stop forgetting about ALL of the customers that banks serve and accept that cheques will likely have a place for another 20 years at least

(PS I don't work for the cheque and credit clearing company!!)

@AnirudhRaghavendra:

According to this MINT article about digital payment transaction values in India, batch mode NEFT is the clear winner.

Batch A2A NEFT: 12,50,000 Crores INR

Realtime A2A IMPS: 65,100 Crores INR

Batch:Realtime = 1250000/65100 = 19.2:1 ~ 20X

Like in UK, batch payment volumes far exceed realtime payment volumes even in India.

This resonates strongly with my aforementioned belief that realtime payments is a hygiene factor.

I can't remember the last time I wrote a cheque must have been years ago. While there are some tradespeople who ask for cheques, most have switched to being paid by bank transfer which is cheaper for them. And the faster payments system means  they receive the funds mostly within the hour. In my experience most people when told about faster payments are astonished that it used to take longer in the past, they assume anything done on a computer is pretty much instant. In the UK batch payments may exceed realtime payments but presumably only because not all the banks and building societies have implemented faster payments yet?

Handling cheques has become a real problem because of branch closure. If there is no branch nearby depositing a cheque can be a real chore, so cheque imaging is very welcome!

Regarding batch payments, it's primarily down to cost of BACS vs FPS.  It costs banks about 3.5p to sent a faster payment (just the scheme fees) vs a fraction of that for BACS.  If you're sending non urgent payments then BACS still makes a lot of sense.

@JamesPiggot:

"...they assume anything done on a computer is pretty much instant." So it's not only my father or mother or sister or wife or daughter, none of whom is remotely connected with fintech or payments tech! It's even more difficult to explain why payments done via computers could fail!! 

"Handling cheques has become a real problem because of branch closure. If there is no branch nearby depositing a cheque can be a real chore, so cheque imaging is very welcome!". Extremely valid point. The banker in Why Branch And Digital Channels Will Coexist Forever told me that, despite 90% of routing transactions going digital, their branch network is growing mainly because of cheques. (For many years, cheque truncation at the backend is fairly ubiquitous in India but there are still no signs of Mobile RDC - probably because of a conservative regulator and / or shift of the entire spotlight to digital payments.)