Smartphone cheque deposits – one year on

We are one year on from the 2014 announcement that smartphone cheque deposit legislation would be changed.

We are one year on from the 2014 announcement that smartphone cheque deposit legislation would be changed. The UK government is expected to make the digital image of a cheque legal tender in 2015, allowing banks to process cheque images rather than the physical cheque itself.

While some sceptics argue the cheque is a dying payment form, the reality is that nearly £840 billion worth of cheques were processed in 2013 according to the latest figures available – equivalent to 10 per cent of all payments made by individuals.

The imminent legislation and the technology that will support it is likely to be well received; but what progress has been made over the past twelve months by banks and what are the main benefits for UK businesses and consumers?

One of the most notable of the initial developments around cheque deposits was Lloyds Bank testing mobile cheque deposit technology with some of its commercial customers last year. The pilot trial allowed its customers to take photos of cheques they had received, using their mobile phone camera, thereby eliminating the need for a branch visit.

Barclays has also recognised the need for inclusive technology which integrates both reliable current methods with the latest technology. In December it started piloting its own service amongst its one million Premier Account holders. It now plans to roll it out to corporate customers and we’re likely to see widespread adoption of the service throughout its entire customer base in 2015.

The Government has described cheques as a “crucial” part of the British payments landscape. Digitally revitalising the format for the 21st century is likely to cut the length of time it takes to process a cheque payment from the current six day timeframe to just two. Smartphone cheque deposits are also a positive move for banks. Not only can they offer technology and systems which fits into their customers’ busy lives, they can dedicate more time to other important services and cut down on administrative costs. It’s also likely that moving the paper cheque into the digital realm will actually create a more secure customer experience than the paper cheque provides today.

Under the current government proposals, customers without smartphones should soon be able to use a similar technology at cashpoints or branches. With the next development set to be the extension of digital cheque deposit technology to Android-based smartphones and charities, 2015 is set to be the year that the traditional paper based cheque takes on a new lease of life.