Most charities unaware of forthcoming changes to cheque processing

According to research by the Cheque and Credit Clearing Company, 70 per cent of charities are unaware of plans to introduce cheque imaging next year to speed up clearing

Cheque imaging
Cheque imaging

Seventy per cent of charities are not aware that fundamental changes to speed up the way cheques are processed are due to be rolled out by the end of next year, a survey has shown.

Beginning on 30 October this year, banks will begin moving to image-based cheque processing: a photograph of a cheque is passed between banks and branches, which means the cheque itself does not have to be sent around the country. Rather than taking six working days to clear, cheques will clear by the end of the day after they are deposited.

Research by the Cheque and Credit Clearing Company found that only 30 per cent of charities were aware that the change was coming although it said this was an improvement on last year, when only 23 per cent of charities were aware of the forthcoming change.

The survey of 1,000 charity financial representatives was carried out between 3 and 28 April this year through telephone interviews.

In the short term, people will still write, send and pay in cheques in the traditional way, but in the future some banks and building societies might offer their customers the option of paying in by sending an image of the check taken on a smart phone, rather than having to physically deposit the cheque in the bank.

Cheque usage has been in decline. In 2009, the payment trade body Payments UK announced that cheques would be phased out over the next nine years. The plans were abandoned after a public outcry.

According to the Cheque and Credit Clearing Company, 477 million cheques were written in 2016. Its survey found that 29 per cent of charities said they received more than half their income from donations by cheque.

Andrew O’Brien, head of policy and engagement at the Charity Finance Group, said more education was needed, particularly for smaller charities, to raise awareness of cheque imaging. But he said the move would have benefits for the charity sector.

"It’s a positive move in that it is one of the ways to keep banks in the game with cheque issuing," he said. "If they had stopped using cheques, that would have affected a lot of charities.

"Many charities use cheques to collect donations from older donors, many of whom prefer to use them. It is also important for financial controls, particularly in smaller charities, where having to have the signatures of certain people on cheques can provide quite a lot of security."

A spokeswoman for the Institute of Fundraising welcomed the move to cheque imaging.

She said: "We are pleased to hear that the new cheque-imaging process will significantly reduce cheque clearing time. This will make a difference for those charities that are able to benefit and is a very welcome initiative."

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