Cheque clearing

cheque clearanceclear checksclearanceclearingphysically exchange the paper check
Cheque clearing (or check clearing in American English) or bank clearance is the process of moving cash (or its equivalent) from the bank on which a cheque is drawn to the bank in which it was deposited, usually accompanied by the movement of the cheque to the paying bank, either in the traditional physical paper form or digitally under a cheque truncation system.wikipedia
40 Related Articles

Cheque truncation

check truncationExchanges Check-Imagetruncate
Cheque clearing (or check clearing in American English) or bank clearance is the process of moving cash (or its equivalent) from the bank on which a cheque is drawn to the bank in which it was deposited, usually accompanied by the movement of the cheque to the paying bank, either in the traditional physical paper form or digitally under a cheque truncation system.
Cheque truncation (check truncation in American English) is a cheque clearance system that involves the digitalisation of a physical paper cheque into a substitute electronic form for transmission to the paying bank.

Cheque

Checkingcheckchecks
Cheque clearing (or check clearing in American English) or bank clearance is the process of moving cash (or its equivalent) from the bank on which a cheque is drawn to the bank in which it was deposited, usually accompanied by the movement of the cheque to the paying bank, either in the traditional physical paper form or digitally under a cheque truncation system.
Daily cheque clearing began around 1770 when the bank clerks met at the Five Bells, a tavern in Lombard Street in the City of London, to exchange all their cheques in one place and settle the balances in cash.

Cheque and Credit Clearing Company

clearing bankclearing banksBank Giro Credits
Jumping forward several centuries, the Cheque and Credit Clearing Company is the United Kingdom's clearing house.
The company has managed the cheque clearing system in England and Wales since 1985, in all of Great Britain since 1996 when it took over responsibility for managing the Scottish cheque clearing as well, and in the whole of the United Kingdom since the introduction of the Image Clearing System in 2019.

Remote deposit

mobile depositremote deposit capture
The legalisation of remote deposit made it possible for businesses and bank customers to deposit cheques without delivering them to their own banks.
Before 2004, if someone deposited a check in an account with one bank, the banks would have to physically exchange the paper check to the bank on which the check is drawn before the money would be credited to the account in the deposit bank.

American and British English spelling differences

spelling differencesorsee spelling differences
Cheque clearing (or check clearing in American English) or bank clearance is the process of moving cash (or its equivalent) from the bank on which a cheque is drawn to the bank in which it was deposited, usually accompanied by the movement of the cheque to the paying bank, either in the traditional physical paper form or digitally under a cheque truncation system.

Bank

Bankingbankerbanking system
Cheque clearing (or check clearing in American English) or bank clearance is the process of moving cash (or its equivalent) from the bank on which a cheque is drawn to the bank in which it was deposited, usually accompanied by the movement of the cheque to the paying bank, either in the traditional physical paper form or digitally under a cheque truncation system.

Clearing (finance)

clearingclearing bankclear
This process is called the clearing cycle and normally results in a credit to the account at the bank of deposit, and an equivalent debit to the account at the bank on which it was drawn, with a corresponding adjustment of accounts of the banks themselves. Daily cheque clearings began around 1770 when the bank clerks met at the Six Bells, a tavern in Dove Court off Lombard Street in the City of London, to exchange all their cheques in one place and settle the balances in cash.

Lombard Street, London

Lombard StreetLombardLombard-street
Daily cheque clearings began around 1770 when the bank clerks met at the Six Bells, a tavern in Dove Court off Lombard Street in the City of London, to exchange all their cheques in one place and settle the balances in cash.

Charles Babbage

BabbageBabbage, CharlesBabbage engines
In 1832 Charles Babbage, who was a friend of a founder of the Clearing House, published a book on mass production, The Economy of Machinery and Manufactures, in which Babbage described how the Clearing House operated:

Audit

auditingauditorspaper trail
On the rare occasions when the total paid did not equal the total collected, other clerks working for the Inspector would examine the paper trail of documents so that the numerical errors could be found and corrected.

Suffolk Bank

The Suffolk Bank
The Suffolk Bank opened the first clearing house in 1818 in Boston, and one was incorporated in New York in 1850.

The Clearing House

New York Clearing HouseNew York Clearing House AssociationClearing House Association
The Americans improved on the British check clearing system and opened a bankers' clearing house, the Clearing House Association, in the Bank of New York on Wall Street, New York in 1853.

The Bank of New York Mellon

Bank of New YorkBNY MellonBank of New York Mellon
The Americans improved on the British check clearing system and opened a bankers' clearing house, the Clearing House Association, in the Bank of New York on Wall Street, New York in 1853.

Federal Reserve

Federal Reserve SystemUS Federal ReserveU.S. Federal Reserve
The Federal Reserve System check clearing system was established in the United States in 1913 to act as a central, well-capitalized clearing house.

Non-sufficient funds

bad checkbounced checkbounced
If there are not enough funds in the account when the cheque arrived at the issuing bank, the cheque would be returned as a dishonoured cheque marked as non-sufficient funds.

Clearing house (finance)

clearing houseclearing housesclearinghouse
Clearing houses were set up to streamline the process by collected all cheques drawn on other banks, and collecting payment from those banks for the total to be cleared.

Radix sort

radix sortingRadixsort
Sort-A-Matic involved a set of metal or leather dividers numbered 00 through 99, operated to implement a form of radix sort: cheques would be sorted by hand according to the first two digits.

Magnetic ink character recognition

MICRmagnetic inkE-13B
Magnetic ink character recognition (MICR) was developed and commercialized in the 1950s, and enabled computers to reliably read routing and account numbers and automated the sorting of paper cheques.

Smartphone

smartphonessmart phonesmart phones
In the process, a depositor would make an image of the physical cheque with a smartphone or other device, and attach the image to a deposit.

Automated clearing house

ACHDirect DepositACH payment
Two methods were developed: the Automated Clearing House (ACH) for smaller payments which complete in two business days, and Clearing House Interbank Payments System (CHIPS) for larger value same day payments.

Clearing House Interbank Payments System

CHIPSwholesale funds transfer system
Two methods were developed: the Automated Clearing House (ACH) for smaller payments which complete in two business days, and Clearing House Interbank Payments System (CHIPS) for larger value same day payments.

Real-time gross settlement

RTGSReal Time Gross Settlementgross settlement
"CHIPS is the largest private-sector U.S.-dollar funds-transfer system in the world, clearing and settling an average of $1.5 trillion in cross-border and domestic payments daily. It combines best of two types of payments systems: the liquidity efficiency of a netting system and the intraday finality of a RTGS."