Image Clearing System
The Image Clearing System (ICS) was launched in 2019, fundamentally transforming cheque and credit processing by enabling digital images of cheques (and bank giros) to be exchanged between banks and building societies across the UK for clearing and settlement.
Aimed at replacing the paper-based clearing system, the ICS is used for sterling cheques drawn on UK bank accounts, bankers’ drafts, postal orders, warrants, government payable orders and travellers’ cheques, as well as bill payments (credits) accompanied by cash or cheques.
Importantly, as well as providing more choice, one of the main benefits of an image-based system is that the cheque clearing process has been sped up, delivering a much-improved, and efficient, customer experience.
The recipient now receives the money in their account more quickly, the money also leaves the account of the person, business or charity that wrote the cheque faster too, especially if the cheque recipient pays it in to their account via a smartphone, tablet or scanner.
Typically, if a customer pays in a cheque on a weekday (before their bank or building society’s advertised cut-off time) they will be able to withdraw the funds by 23.59 on the next weekday (bank holidays excluded, and provided the cheque doesn’t bounce)*. However, some banks and building societies may allow their customers to access their funds earlier than this.
Even with the introduction of the image-based system, it’s important to remember that customers will still write cheques as they always have done, give them to recipients in the same way, and can continue to pay in cheques via traditional methods if they want to.
* If a customer pays in a cheque at a Post Office, the above timescale will increase by at least one additional day. This is because the Post Office has to send the cheque to the customer’s bank before it can be entered into the clearing system.
Bank giro credit clearing
Bank giro credits – used to accompany cheque and cash payments to credit a bank account / pay a bill – are cleared and settled in much the same way as cheques.
So, when a customer pays a utility bill at the branch counter by cash or cheque, the accompanying bank giro credit is turned into an electronic message that passes through the ICS to the bank of the utility company concerned, to pay that bill.
It operates to the same timescales as cheque clearing which means that if a customer pays their utility bill at a branch counter on a weekday (before the advertised cut-off time), the payment will reach the bank account of the utility company concerned by the end of the next weekday (bank holidays excluded).