Treasury legislation that will significantly speed up the time taken to process cheques is set to come into effect on Monday 30 October 2017 to coincide with the United Kingdom.
The Appointed Day Order for the Bills of Exchange (Amendment) Act was laid before the October sitting of Tynwald.
The legislation will allow cheques to be presented electronically as a scanned image instead of the original paper version. The new system will enable customers who pay in a cheque electronically to withdraw the funds much earlier. Currently it can take up to six working days for a customer to be sure a cheque will not be returned unpaid.
The system will be gradually phased in across the UK so that over time, increasing numbers of cheques will be cleared using the image-based system and more customers will benefit from the shorter timescales. This will improve efficiency and generate cost savings, as well as helping to future-proof the cheque as a payment option.
Customers will still be able to write cheques and present them or post them to recipients in exactly the same way they always have. A number of methods remain available for people paying in cheques.
Some banks may offer customers the additional option of paying in an image of the cheque using a secure mobile banking app on their smartphone or tablet, rather than having to go to the bank to pay the cheque in.
Bill Shimmins MHK, the Treasury Member who took the legislation through the House of Keys, said: ‘The transition to an image-based cheque clearing system will deliver important benefits for many individuals, businesses and charities. It is a way of embracing technology to provide more choice for consumers.’
Chris Till, President of the Isle of Man Bankers Association, said ‘This legislation will mean banks in the Isle of Man can operate the same system that will be in place in the UK. This is important for both clients and the banks themselves given the cheque based transactions which take place between the Island and the UK as well as for transactions on-Island.’
Banks in the Isle of Man will advise customers at the appropriate time regarding their individual roll-out plans for the new system.