Legislative update: cheque imaging and payment systems access
Legislation has recently been introduced to Parliament which makes two changes affecting payment systems. As part of our commitment to transparency, the Payment Systems Regulator sets out below details of these latest developments.
The Small Business, Enterprise and Employment Bill was introduced to Parliament on 25 June 2014. The Bill takes forward a number of government commitments on small businesses, and contains two provisions that relate to payment systems:
- Clause 11 makes provision for ‘cheque imaging’. This allows for cheques to be paid electronically, through presenting an electronic image in place of the cheque itself. Many other countries including the United States, China, India, France and a number of other European countries already operate a cheque imaging process. The use of cheque imaging will enable more open access to the arrangements for processing cheques and a faster and better service for users. The traditional methods for paying in physical cheques will be preserved.
- Clause 12 amends section 108 of the Financial Services (Banking Reform) Act 2013 to give the PSR the ability to use its powers to enable firms to gain access to payment systems that are designated under the EU Settlement Finality Directive.
The Bill is in the early stages of parliamentary scrutiny and expected to receive Royal Assent early in 2015.