12/26/13. Britons to pay in checks via smartphones. rt.com
The UK authorities plan to allow bank customers to deposit funds via submitting photos of checks taken on their smartphones. The measure will cut the number of paper transactions and speed up money transfers.
Instead of going to a bank and staying in line customers will be able to send the check electronically, says the BBC.
Pictures of both the front and back of the check have to be sent to the bank, where the details and signature will be scanned and verified by computer.
Barclays is planning to launch a pilot program by April 2014. The technology will allow checks to be cleared in two days rather than the current five.
The move will require some changes to the law, making the transfer method more convenient and secure. The photos won’t be stored on the phone, meaning payment data won’t be stolen in case a device is lost.
“Moving into a virtual world will actually create a more secure customer experience than the paper experience today,” said Antony Jenkins, the chief executive of Barclays. “I think people are going into branches less and less, particularly as a result of mobile banking.”
The industry says the majority of young people already use electronic systems, rarely resorting to traditional checks.
The new technology will inevitably mean more mobile services will appear, causing job cuts in unnecessary branches.
In the middle of November Barclays said it would axe 1,700 high street jobs, after closing 37 branches in the first six months of the year.
The reform is hoped will promote the continued use of checks, after the UK Payments Council’s attempted to get rid of the trusted payment method by 2018 faced public criticism.
“We want to see more innovation so that customers see the benefits of new technologies,” said Sajid Javid, the Financial Secretary to the Treasury. “We want checks to have a crucial role in the ongoing success of the UK.”
A quarter of all business payments, and 10 percent of payments by individuals in 2012 were made by check.
The UK is not the first country to introduce such technology. It’s also available in US, France and Asia. The US applied it nine years ago with the Check 21 law, mainly directed to cut paper transport costs and risks.