The methods of transferring money employed at present, namely payment by cheques, credit transfers and direct debits are only partly automated (by the use of reader-sorter machines in the cheque clearing and by certain payments being made partly through the use of computer tapes processed by Bankers Automated Clearing Services Ltd.). The inter-bank cheque clearing system is a fully centralised operation with all the cheques being sent to London by the collecting branches on the day they are paid in, and they are then exchanged in the Clearing House and processed in the clearing departments of the paying banks the following day in order to reach the drawer’s branch on the third day. The head-offices of the paying and collecting banks respectively debit and credit their customers’ accounts on the second day because the accounts are recorded on computer tapes kept by the head offices but it is still possible for a cheque to be dishonoured by the drawer’s branch (e.g. because of countermand as late as noon on the fourth day). Although the Cheque Clearing system is efficient and copes with a volume of cheques which has been expanding at the rate of about 7 % per annum in recent years, the banks have become concerned about their ability to absorb these increases and about the total duration of the clearing operation. The two other systems of transferring money at present in existence, namely credit transfers and direct debits, have also given problems in transmission and the completion of the payment takes at least three days. Despite the automation of standing orders, the credit clearing still handles 125 million paper vouchers per annum. Credits can be used for various purposes and no standard forms have yet been agreed upon by the banks to facilitate machine processing by optical character reading machines. The result is that it is not yet possible to apply a single automated technique to the Credit Clearing. Finally, the direct debiting system, although a considerable advancement in money transfer, was not designed for electronic transfer but a voucher system. At present it has the same drawbacks and imposes the same delays as the cheque clearing except where initiators of direct debits deliver their own computer tapes to Bankers Automated Clearing Services Ltd.

In order to keep in line with the commercial needs for rapid payments, a system of fast payment clearings with the maximum ease is necessary and the banks are looking increasingly towards electronic money transfers through complex inter-bank computer links to solve these problems.