Is there an end to waiting 3-10 days for a cheque to clear?
IBM and US banks launch cheque imaging archive
IBM and two of the US' biggest banks have formed a company to create a digital archive of cheque images.
This should speed up cheque processing, and allow Web access to cheque images.
Can it be true? Is there an end to waiting anywhere between 3 and 10 days for a bloody cheque to clear? It looks quite like it as long as the UK's Central Clearing House takes it up.
The new system should link banks nationally and allow them to exchange cheque images and clear cheques electronically. A participating bank will make an image of a deposited cheque, place it in the archive, and then the bank it’s drawn against can access it from there. This is all instead of a physical cheque being passed back and forth through the clearing system for several days.
The business, Viewpointe Archive Services, has been set up by Bank of America and Chase Manhattan, along with IBM, and will begin operations this year. In a statement the company says banks will be able to cut the cost of cheque processing by 30 per cent, and that consumers will be able to use the Internet to retrieve copies of cheques they may need to verify payments. ®
If you want to understand the process for cheque clearing this is the process online bank Egg kindly outlined for us.
The process for cheque clearing
Day 1 Cheque received at Egg, which is sent by post to the Central Clearing House. All cheques from all banks have to go through here and they require the physical cheque so it has to be sent by post.
Day 2 Central Clearing House clear the cheque - cheque is sent by post to the bank it is to be drawn against.
Day 3 Egg assumes the cheque is cleared and it appears on the balance sheet and starts earning interest. However, the bank the cheque is to be drawn against have until 12 noon on Day 4 to reject the cheque. If they do this they send the cheque in the post to our clearing bank, which then send the cheque in the post to us. So we may not know it has bounced until Day 6 or 7. You will note that in our Ts & Cs we quote up to 8 days to clear a cheque - this is the reason why.
The customer, however, earns interest from day 3 as it is assumed the cheque will clear.