Lloyds Bank is the latest financial institution to trial mobile cheque imaging technology. Cheque imaging allows cheques to be cleared without the need to visit a physical bank. Instead, customers simply take a picture of the cheque in question, within an app on their phone. The captured image is then sent off securely to be cleared.
A similar service has already taken off in the US. Bank of America earlier this year reported nine per cent of all the cheques it processed by imaging technology on a mobile or tablet. And in the UK, Barclays has been running a trial since June.
Key to this latest development in the UK, was a law change passed by the House of Commons earlier this year. The law had to be changed to allow cheques to be cleared via mobile imaging. Previously the physical cheque had to be processed by a bank and clearing centre.
My initial reaction to the idea of mobile chequing was a big: "so what?" I got my chequebook out - well let me rephrase that: I rummaged through a cupboard to find where my chequebook was and had a look. I could see that since receiving it four years ago, I have torn out only two cheques. I think I am of a generation that simply do not use them.
Whenever I have encountered a cheque in my life, they've normally been tucked neatly away in a birthday or Christmas card (thanks Nan!). And I think that is probably how, among consumers, cheques are most used these days. I don't mean exclusively as gifts, but more precisely when older generations are sending or paying money in a tried and trusted manner. Funnily enough then - a mobile solution to processing cheques is not of much use to the people who write and send them, but more so to those slightly cheque illiterate people like myself, who receive them on the odd occasion. However, I haven't received a cheque in a while - Nan likes to deal in cold hard cash these days - but for those that do receive them once in a blue moon, an app like this perhaps embedded in already existing mobile banking app, could be very handy on the odd occasion to save you a trip to find a branch.
It's in the corporate world though that cheque imaging - though I suspect not on a mobile - could have the biggest impact and save a hefty amount of operational cost for businesses nationwide. Barclays for example estimate that they cleared some 46 million cheques last year for corporate customers with a total value of more than £100 billion - which begs the question how many bank tellers would it take to photograph 46 million cheques.
So it would seem that cheque imaging, and in particular industrial scale cheque imaging has some potential. After all, according to the "Cheque and Credit Clearing Company" some 64 per cent of the UK's commercial businesses wrote out cheques last year and that added up to almost 300 million processed cheques in total.
So while I'm sat here thinking: "perhaps cheque imaging might be a nice little addition to my personal mobile banking experience: a quaint marriage between the old and new"; I'm not at all sure that Lloyds or Barclays are sat there thinking of me. And who can blame them.
By Matthew Taylor 16th December 2014
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