Five-day Cheque Clearance “too long” say Treasury Committee

Banks and the UK Payments Council must work together to speed up cheque processing so they take less than five days to clear, the Treasury Select Committee has said. An inquiry by the House of Commons Treasury Select Committee supported the recent decision by the Payments Council to retain cheques, but said that it must work with banks to process cheques faster than the five day average. A Committee spokesman said it wanted to see banks improve their internal administrative procedures in order to reduce the length of time it took for cheques to clear, but that no time frame had been specified.   Forum of Private Business spokesman Phil McCabe said that faster clearance times would be a very positive move. “It would make a real difference for small firms if funds were t... »

Cheques Will Not be Scrapped as “no viable alternative” Available

The Payments Council’s decision not to abolish cheques has been welcomed by business groups, as no viable alternative payment system has been proposed. Plans had been announced by the Payments Council 18 months ago to scrap the cheque system by October 2018, but the financial trade body has since confirmed that cheques will remain in place for “as long as customers need them” and plans to establish an alternative payment method had now been abandoned. John Walker, national chairman of the Federation of Small Businesses, called the decision a “victory for common sense”. “Scrapping the cheque would have put many small firms at a disadvantage, especially in rural areas which rely on the cheque for payments.” The Forum of Private Business (FPB) also pr... »

Customer Cheques not Guaranteed from June, warns FSB

Small firms that accept cheque payments will have no protection if cheques bounce after the guarantee scheme is scrapped in June, the Federation of Small Businesses (FSB) has warned. Currently, the cheque guarantee card scheme (PDF) means that up to £250 is guaranteed to be paid by the bank if the cheque bounces. On 30 June 2011 the guarantee scheme will be scrapped, although cheques are not due to be phased out until 2018. The FSB’s warning comes after a survey from retail payments firm WorldPay found that more than three-quarters of small firms are unaware that the guarantee scheme is being scrapped, and three out of five have made no alternative payment plans. FSB spokeswoman, Sara Lee, said that the change would deter a lot of firms from accepting cheques. “Many service fir... »