The Government has pushed ahead with legislation that will see individuals able to pay in cheques remotely by taking photographs of them with their mobile phones.
The Small Business, Enterprise and Employment Bill, introduced to Parliament this week, will bring about changes to existing rules and allow banks to process cheques using ‘digital imaging’ technology.
It is hoped that the new payment method, offered in addition to standard deposit methods, will reduce transfer and clearing times from six days to two, and eventually make cashing a cheque faster than completing a Bacs transfer.
Customers will be able to email a picture of the cheque to their bank along with their account number and have the funds transferred without having to queue in their local branch, meaning that cheques can be paid in to accounts at any time of the day or night.
Although the use of cheques has been steadily falling over the last few years, more than 23 million people in the UK receive cheques for their birthday and 60 per cent of charity donations are made in the same way.
They also play a crucial part in the payments landscape for small businesses. According to Government figures, sole traders and other micro businesses continue to make over a fifth of their outgoing payments in cheques.
The technology has proved popular in the US over the past 10 years. According to recent research there, some 20 million consumers used mobile remote deposit capture last year compared with 10.9 million in 2012 and it is predicted that the mobile user base will increase to 33 million this year, 47 million in 2015, and 61 million by 2016.
Mackrell Turner Garrett Solicitors in London
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