From October this year, businesses that pay cheques into their accounts will be able to get the money cleared within one working day.
Cheques can currently take up to six working days to clear.
The new system, announced by the Cheque and Credit Clearing Company (C&CCC), is inspired by Barclays’ image scanning technology.
Where cheques currently need to be physically transported between banks, the new system will scan images of the cheques which can be exchanged between banks and branches.
The technology will be rolled out for several banks and building societies on 30 October 2017. C&CCC said all banks will have access to one-day clearing by 2018.
Figures suggest that cheques still play an important role in business. The latest report shows that 477 million cheques were written in 2016 with the average value standing at £1,125.
Likewise, a study revealed that nearly nine in 10 UK charities and two-thirds of businesses both received and made payments by cheque in an average monthly period
James Radford, chief executive officer of the Cheque and Credit Clearing Company, said: “These changes will put cheques firmly in the 21st century, delivering real and important benefits for the many individuals, charities and businesses that regularly use cheques.
“Not only will cheques clear faster but banks and building societies may offer their customers the option of paying in an image of a cheque rather than the paper cheque itself.”