Canadian Cheques Get a Makeover

Under the new specifications, all cheques used by customers of financial institutions operating in Canada will require some changes. In the current clearing process, about five million cheques have to be transported between financial institutions every business day. The CPA is leading an industry-wide initiative to make this process more efficient by capturing images of cheques so that they can be cleared electronically. Implementation of this new clearing process is targeted to begin in late 2006. In preparation for this shift, the CPA has issued a new version of the Canadian standard for cheque formats and printing specifications (CPA Standard 006, Part A). The new specifications are necessary to ensure that high-quality cheque images can be captured, both for clearing purposes and for delivery to clients, and to enhance processing efficiency. Prior to finalizing the specifications, the CPA invited comments from stakeholders on proposed changes and took into account input received. Most organizations that participated in the consultation process indicated they could make the transition to the new cheque specifications within one year. However, with a view to minimizing impact on stakeholders, the CPA and its member financial institutions have established a two-year transition period to ensure cheque printers, software providers and businesses that produce their own cheques have ample time to make the necessary changes. Thus, all Canadian business cheques should conform with the new specifications as outlined in CPA Standard 006, Part A by December 31, 2006. Since most consumers order their personal cheques through their financial institutions, these already follow a more standard format than business cheques. Consequently, it will likely be possible in most cases to continue to process old-format personal cheques on an interim basis until consumers have used up their current cheque supply, as long as suitable images can be captured from them. As of April 2005, all cheque orders made through financial institutions or their supplier will be fulfilled with new-format cheques. This approach will contribute to a smooth transition for consumers. Cheque printers, software providers and organizations that print their own cheques are strongly encouraged to provide pre-production samples of their new cheques to their financial institutions Quality Assurance Division to verify that they meet the new specifications. These organizations should contact their financial institutions for more information about the testing process and timelines. Key changes to the cheque specifications include: - adoption of a numeric date field in one of two specified formats (MMDDYYYY or DDMMYYYY). As two formats are permitted to reflect different practices in English- and French-speaking Canada, field indicators must be printed below the date field to indicate which format is being used; - a mandatory serial number in the MICR line encoded on the bottom of the cheque (until now the serial number has been optional); - an increase in the minimum length of a cheque from 6 to 6 1/4, or 15.88 cm, to ensure there is sufficient space to accommodate the mandatory serial number in the MICR line; - standardized positions for key fields on the cheque, such as the date field and the amount in figures; - disallowance of elements that may hinder the capture of images or data from the cheques (e.g. inverse printing, italics or slanted fonts, a bottom border printed below the MICR line and the use of black carbon on the reverse of cheques will not be permitted); - a provision to ensure that security features do not interfere with key data, or areas of interest as defined in Standard