The UK Treasury has announced that British banks will soon accept photos of cheques taken on smartphones.
A change to the law means that banks will now be required to process pictures of cheques taken on smartphones. The amended statute – called Check 21 – removed the banks’ right to request the actual cheque before processing it.
The move is expected to reduce the time it takes to process a cheque from six days to two.
Customers of US banks have been able to take pictures of cheques using smartphone apps for four years.
“We want to see more innovation so that customers see the benefits of using new technologies,” financial secretary Sajid Javid told the BBC. He said that the Treasury sees the move a way of keeping cheques alive as a method of payment.
Barclays is the first bank to trial the new system. It will launch an app in April 2014 that will allow customers to take a picture of a cheque and process it. The rest of the UK’s banks are expected to launch their own apps before the end of the year.
It is currently unclear if the new law will change the rules for business cheques. Only ten per cent of cheques processed in 2012 were written by individuals. Businesses were responsible for a further 25 per cent.
Image credit: JP Morgan Chase