Businesses have until September 2, 2008 to make sure that their cheques comply with new standards set by the Canadian payment Association’s (CPA), which have been introduced so that financial institutions can exchange images of the front and backs of cheques rather than the actual cheque itself.

“In the current clearing system, almost 5,000,000 paper cheques must be transported and exchanged between financial institutions (FIs) each business day. In the future, this process will be replaced by capturing images of the front and back of cheques and securely transmitting them between FIs,” said the CPA.

A limited range of paper stock as well as standardized layout specifications are key components of the new criteria. The changes will help financial institutions reduce storage requirements, more quickly notify customers of returned cheques and - most importantly – make sure that the cheques can produce a high quality image for electronic distribution.

Cheques must have the date field printed under the date to show the format that has been used (e.g. Y,M,D; M,D,Y; D,M,Y) They must also have a verification phrase printed on a specified location on the back of the cheque; the phrase will then act as a reference point that financial institutions can use to confirm that a good image of the back of the cheque has been captured. New technical specifications have been created to reduce the amount of “background clutter” created by design elements.

Businesses that order new cheques or that use a software package to produce cheques will need to ensure that they meet the new standards before the end of the grace period. This could require software upgrades or possibly the purchase of new cheques. Most major cheque suppliers will already be supplying cheques in the new format when their clients place orders. Nonetheless, it is always a good idea to double check that your printer has adopted the new specifications before placing an order.

SOURCE: CPA

More information can be found on the CPA's web site at www.cdnpay.ca.

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