Freelancers who pay or get paid by cheque will soon see the money go through as early as one working day, compared to at least six days currently.
From October 2017, banks and building societies will be able to clear the funds written on the paper payments by exchanging pictures of them, thanks to new digital imaging technology.
Co-ordinated by the Cheque and Credit Clearing Company, the changes mean the payee will see a “speeded up” processing time, meaning their cash will be received more rapidly.
But once the cheque is paid in, the person or business who wrote the cheque will also find that the money will leave their account to a faster timescale too, the company cautioned.
To reflect the changes, banks and building societies can start offering the option of paying in an image of the cheque, by using a secure mobile banking app on their smartphone or tablet.
But, to reassure those who would still prefer to physically deposit the cheque in their local branch in person, the company said such e-cheques will only be an add-on, not compulsory.
The changes represent a resurgence for the cheque, as there were calls for cheques to be torn up after some major retailers started to no longer accept them.
But aware of the 470million or so transactions via
cheque each year, MPs silenced the calls for the shredding by 2019, saying the
paper payment form would remain for “as long as people need them.”