Bank-check issuers will have to get new checkbooks with new and larger check designs as the local system transitions its clearing process to electronic, the central bank said.
In a press briefing on Monday, the Bangko Sentral ng Pilipinas (BSP) bared fresh details on its initiative to move the check clearing process to an electronic imaging system, including new features of the new check-design standards.
BSP Assistant Governor Johnny Noe E. Ravalo told reporters the new check design—which will be called the Check Image Clearing System (CICS)—will be larger with a length of 8 inches and a width of 3 inches.
The new check, according to Ravalo, will also contain new embedded security features to prevent check fraud if banks are not able to inspect the actual physical check. Some new security features will be visible to the naked eye and some will be invisible and will only be seen through the scanner.
A waiver will also be included, as it is part of the contract between the consumer and their corresponding bank to authorize the financial institution to scan the check and allow for electronic clearing.
The Philippine Clearing House Corp. (PCHC) will be the one to accredit select security check printers. The PCHC will also control the supply of security paper to be used in the new checks.
PCHC President Emmanuel Barcena said the new checks will not have additional cost to financial customers. Only banks are seen incurring additional costs as they acquire new scanners and other necessary infrastructure to accommodate electronic-check clearing.
As such, checking-account holders are advised to coordinate with their banks with regard to the change in checkbooks and their corresponding schedule.
Barcena said the deadline for the acceptance of old design checks will be on June 30, 2017.
However, he clarified that after June 30, checks issued in old design will not lose their value, but must be presented over-the-counter of the drawee bank to withdraw its value.
Central bank officials earlier said the CICS will start, or go “live”, in January 2017. Ravalo said banks are in the process of preparing branches to acquire the necessary scanners and to establish connections to their main office and to the clearing house.
Barcena added that they have conducted a first simulation on October 21, and the live run of the new system has been successful. He said 60 percent of the member-banks participated in the October simulation where they ran more than 20,000 checks in the system.
Barcena said they are planning to conduct another simulation on Friday, with an expectation of more participants.
Barcena added that PCHC runs about 700,000 checks on regular days and about 1.4 million checks on peak days, such as on November 2.