“With the upgrade, mandates for the entire industry will be centrally managed via the ACH, resulting in more accurate mandates, faster processing times and improved security. It is also expected that the seamless integration will increase uptake from customers and service providers, including utility companies and other institutions that bill for services on a recurring basis. To benefit from automated direct debits, service providers can apply at a bank for an originator code which customers will use to authorise the payments.”
Barclays Bank of Kenya has already informed its clients that it will be effecting same-day cheque clearances from one Barclays account to another, which is seen as a first-mover in the use of this new upgraded service. More banks are expected to follow soon.
The new system will also enable faster clearance of foreign currency cheques. Currently, it takes seven days to clear such cheques. The upgrade will enable clearance within two days.
BitcoinKE has previously showcased an instant cheque clearing system powered by a private blockchain that makes it possible for cheques to be cleared more efficiently and safely using smart contracts. The sample cheque clearing system, powered by the Aeternity Blockchain can be seen below: