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Digital banks snub photo cheque imaging system

Monzo has turned its back on cheque imaging. Few other challenger banks have shown any interest.


Digital bank Monzo has pulled out of national plans allowing customers to pay in cheques by taking a picture on their phone, believing its younger customers have little use for this service.

The process called, the cheque image clearing system, lets customers take a picture of the document and submit it on their banking apps.

The system also allows banks to clear cheques by exchanging pictures of them, speeding up cheque payments to within two days, from five to six days currently.  Previously, all cheques had to be physically transported back to the bank that issued them.

But Monzo payment scheme manager James Berry wrote on a company blog this week that other “exciting projects” the platform is working on are a greater priority.

He wrote: “Unfortunately that means we’ve chosen to pause work on joining the image clearing system for now. And we can’t say when we’ll pick it back up.”

Berry added part of the reason the firm has stopped work on this project is because “less than 0.1% of our customers have ever deposited a cheque”. The bank, founded in 2015, says it has over one million UK customers, many of whom are millennials in the 25 to 30 age group.

This imaging system is run by the Cheque and Credit Clearing Company, and was launched in 2017. However, take up and promotion of the service among banks has been fitful.

The system had 18 members at the end of 2018, virtually all of whom are high street names such as Barclays,The Co-operative,Royal Bank of Scotland and HSBC.

Challenger banks such as Atom Bank,Starling and Monzo belong to national payment systems such as Bacs, or Faster Payments.

Just under 293,000 cheques were transferred between banks in 2017, according to the Cheque and Credit Clearing Company, a fall of 15 per cent compared to the year before. This was worth just over £356m, an 11 per cent drop on the previous year.   

By contrast, there were nearly 119 million contactless cards in circulation by the end of 2017, two for every person in the country. The amount spent on them almost doubled to £5.6bn, compared to the year before.  

Banking body the Payment Council said in 2009 it wanted to phase out cheques entirely by 2018. However, in 2011 the Coalition government ordered they should be retained “as long as they are needed”, because older people rely on them.

The use of cheques peaked in 1990, when they accounted for more than 4 billion transactions.

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