"The advent of the Bahamas Automated Clearing House will affect every single person who deposits money to a chequing account, writes a cheque or wishes to pay a bill online," said Brian Smith, BACH's business manager.
"By speeding up the time it takes for deposits to clear, it will provide a boost to businesses, particularly those that depend for much of their revenue on cheques from customers. Individuals will benefit as well because they will have access to the B$ cheques they deposit on Monday as early as Tuesday. No longer will anyone - businesses, institutions or individuals - have to wait for up to five days to use the money that is rightfully theirs."
But speedy clearance of deposits means those who write cheques must have funds in their account to cover them, or be prepared to pay fees to their banks for returned cheques.
Brian Smith
"For years, as long as anyone can remember, because it took so long for a cheque to clear in the Bahamas, individuals 'perfected' the habit of writing a cheque based on funds they expected to deposit later," said Mr Smith.
"That practice, in fact, was illegal and those days are gone. With the introduction of system-wide electronic imaging, banks will no longer transport physical pieces of paper back and forth. Once the deposit is made by 3pm, the cheque will clear overnight and be available the following business day."
In addition to slicing deposit clearance time from up to five days down to one, the BACH will expand online bill payment and commerce.
"Before the ACH, you and your employer had to bank at the same bank or your employer had to maintain accounts at various banks if that employer wanted to pay you by direct deposit," said Mr Smith.
"Within three months of the ACH going into effect, banks will be to accommodate interbank transfers as easily as they do intra-bank transfers now, meaning direct deposits may be made to any account in the system, even if the employer and employee bank at different institutions. The same principle will apply to any bill you want to pay. You do not have to go to the paint store or the doctor's office to pay a bill or call your plumber back to collect a cheque. You can have it deposited right into their account while you are sitting at home on your laptop handling your online banking, watching the Heat play the Lakers."
Converting to electronic clearance also improves security, eliminating the need for cheques to be physically transported between banks with messengers carrying such deposits in satchels. All seven clearing banks are participating in the system that allows confidential same day settlement or clearance of direct credit and next business day clearance of Bahamian dollar cheques and debits.
Those banks include Bank of the Bahamas, Citibank, Commonwealth Bank, Fidelity Bank (Bahamas), FirstCaribbean International Bank (Bahamas), RBC Royal Bank of Canada and Scotiabank. Regulatory oversight is provided by the Central Bank.
