US shows speedy way with cheques

A NEW law coming into effect in the US to speed up cheque clearing once again highlights the very different service British banks provide for their customers.

Already 90% of cheques in the US clear in a day ... compared with three to 10 days in the UK.

From Next month the Check Clearing for the 21st Century Act, known as 'Check 21', becomes law and the hope is that the banks will better that 90% figure while at the same time saving an estimated $2bn (£1.1bn) in processing and transportation costs.

Tens of billions of paper cheques are processed annuallyin the US, and most are currently flown around the country. With 'Check 21' banks will be allowed to send electronic images rather than having to return original cheques to their issuing banks.

There are also benefits for small businesses, which can install terminals in their premises to transform paper cheques into electronic substitutes to be deposited immediately. Businesses will know very quickly if they have been given a bad cheque.

The changes will also mean cheque-writers will be aware they have to have funds available as the 'float' time will all but disappear.