Friday 10th January, 2014

The Treasury has announced that UK banks are to accept photos of cheques sent by smartphones - in a move which should reduce the processing time from six to two days. The plan is to allow consumers to send photos of cheques or go to banks with photographs of cheques in a similar way that airline and travel tickets are currently used.

Despite the growth of debit cards and alternative methods of transferring money, cheques remain crucial to some, particularly smaller business and certain types of consumer. Roughly £840bn worth of cheques were processed last year. Back in 2009, a move was announced that cheques were set to be abolished by 2018, but the backlash from several sources meant that the decision was over-turned.

Barclays said it is planning to introduce mobile cheque deposit next year. Customers without smartphones would be able to use similar technology at cashpoints or branches, or continue to pay in paper cheques, as they do now.

John Allan, chairman of the FSB, said: "Many of our members, and their customers, still rely on cheques so will be pleased with the investment and innovation to ensure their continued use. Speeding up cheque payments into business accounts is to be welcomed as many find the current process frustratingly slow."