Guest blog: Does your counter cheque make the ‘grade’?

With the electronic transfer of the cheque image, this clearing cycle has been reduced to two working days for access to cleared funds. However, the process presents some new challenges.​

Did you know that since last year all chequesCheque-(1).jpg cleared in the UK are processed through the Image Clearing System (ICS)? The ICS replaced the paper clearing process that saw millions of cheques transported around the UK and cleared in anything up to 6 days. Now with the electronic transfer of the cheque image, this clearing cycle has been reduced to two working days for access to cleared funds. However, this cheque ‘truncation’ process presents some new challenges.

Now that the image is used as the legal entity, there is no paper document to refer back to and in the event of issues with the quality of the scanned cheque image, little recourse but to reject the cheque in the clearing process with all its associated administrative costs.

The quality of scanned images can be affected by two main causes:

1) the method of infilling the cheque, for example, handwritten in coloured inks, or created by accounting software which drives a dot matrix printer using poor quality ribbons or a laser printer with inadequate toner coverage.

2)  the quality of the scanning device, whether it be a mobile phone and app, a desktop cheque scanner for larger volume cheque users or in branch where teller or back-office scanners are used.

Within a Building Society branch environment, when producing counter cheque for customers, the quality of print will be determined by the age and performance of in-branch printers. For many, the use of passbook printers to infill counter cheques will depend on the quality of the ribbon and the resolution of the print head in the machine.

By ensuring that you use the manufacturer’s recommended replacement ribbons, by using black text and performing regular cleaning programmes on the passbook printers will go a long way to improving the printed quality of your branch cheques and help in preventing their rejection in the clearing process.

However, the quality of the cheque image is not the only issue now faced in clearing. As fraudsters have now turned their attention to the ‘good old dependable cheque’, the instances of attempted cheque fraud have risen. Fraudulently altered or counterfeit cheques entering the clearing system have less opportunities to be spotted than during the old paper system when the physical documents could be inspected.

This has led to many of the UK clearing banks insisting on the use of Image Survivable Features (ISF’s) printed on the face of the cheque, which will survive the scanning process. These features encrypt key data from the face of the cheque into the ISF. This information is decrypted during clearing and any anomaly flagged up with the cheque rejected thus preventing any potential fraud.

The addition of ISF’s to the cheque can either be printed at the time the cheque base stock is produced by your security printer, or during cheque infilling in branch using your own systems. 

For information and advice to ensure your counter cheques make the ‘grade’, visit The TALL Group website.