The government is expected to announce a new law allowing “cheque imaging”, which will see the old-style money payment method finally go digital.
Banks will roll out the new process, which will dramatically speed up cheque payments which currently have a reputation for being extremely slow.
Under current legislation, a bank has the right to demand to see the physical cheque before approving payment, so cheques are transported around branches and central clearing centres.
A change in the law would mean banks can accept images of the cheques instead. These images could be shared electronically, speeding up the process from a six-day cycle to a mere two days.
The system is already used in countries including France, India, China and the United States.
Cheque usage in the UK has been in decline for more than two decades, falling from four billion cheques written in 1990 to 848 million in 2012. A decision to end cheque usage by 2018 was reversed three years ago after the Payments Council faced complaints from small businesses and charities.
Barclays is conducting a cheque imaging pilot scheme for customers with iPhone, and plans to expand the service through its banking application to Android phones later this year.
Steven Roberts, director for transformation at Barclays, said: “We don’t expect everybody to submit their cheques through mobile phones, but we would love the legislation to change [so] other banks accept an image.”