Cashless, Global trendsApril 18, 2016

Mobile cheque payments to be delayed by another year

By Tim Wallace for the Telegraph

Bank customers will have to wait another year before they canpay in cheques via their mobile phones, as banks are falling out over plans to roll out the new technology.

Mobile cheque imaging is intended to be the next big step forward in saving customers unnecessary trips to the bank branch by allowing them to simply take a photo of a cheque instead. It will also reduce the cost to banks, which currently have to transport millions of paper slips around the country every day.

The industry had hoped to launch the technology to all customers this July, but progress is slow as each bank has to come up with a system that works and then make sure they can all process photographs of each others’ cheques.

More than 500,000 Barclays customers have signed up to its pilot scheme, while Lloyds also ran a trial for its small business customers and its own staff. However, each programme only allows the bank’s own cheques to be paid into its own accounts, limiting its usefulness.

Barclays and Lloyds have trialled the tech with their own customers, but so far the rest of the industry has not joined in CREDIT: CHRISTOPHER PLEDGER/GETTY

Regulators and the government had wanted banks to have the system in place by this summer, but it now seems they will only achieve it just in time to hit the legal deadline of October 2017.

That has led to tempers fraying between the banks.

“To say the other big banks have been sluggish is an understatement,” said a source at Barclays.

“The frustration is that other banks are standing in the way of progress, even though this would benefit their own customers.”

It is thought that around £300m-worth of cheques go unprocessed each year as customers fail to make the journey to a branch, indicating the scale of the potential gains if customers could pay them in via their smartphone instead.

Big users of cheques include charities, which were at the forefront of a movement in 2010 to save cheques after banks raised the possibility of scrapping the traditional payment method.

A Barclays spokesman said: “We are ready to work with any bank to make cheque imaging an industry wide service – because we continue to believe that this digital technology can make banking more convenient for customers. We don’t give a running commentary on any detailed discussions with other banks.”

Meanwhile Barclays is offering a new service to its small business customers which allows them to see data on other local firms.

The idea is that SMEs can gain intelligence on local shopping habits and business expenses, as well as researching potential locations for new stores.

The bank hopes that it represents a new way to make money from the huge amounts of transaction data which sits inside its systems but typically goes to waste.

“For any small business the extent to which you know your local market and customer base is critical for growth,” said Barclays’ UK chief Ashok Vaswani.

“But until now this valuable knowledge has been hidden inside detailed payments records and two-thirds of SMEs tell us they are far too busy to analyse it themselves.”

first appeared at the Telegraph