Automated near real-time Cheque Clearing System with Digital Cheque

Abstract

Cheque is the most demanded non-cash retail payment instrument in Sri Lanka, which is accounted for more than 90% of total non-cash retail payment transaction. Total value cheques cleared per day is gradually increasing and it has been surpassed more than 20billion per day. These volumes suggest the continual importance of cheques in Sri Lankan Economy. Various modes of digital payments are taking the space of this well mature payment mode due to its few weaknesses, such as time to realize a check, signature validation and logistics. To overcome such weaknesses, this research proposes a secure near real time cheque realization process based on blockchain technology. Ethereum platform has been chosen to demonstrate the proof of concept due to its ability to run the programming code of any decentralized application on blockchain technology. Signature validation of paper cheques are getting more and more difficult due to increasing cheque volumes. To properly validate the signatures, it is required to keep many factors to be accurate in cheque imaging. Signature forgery also is not easy to detect in this manual or semi-automatic process and leading many financial loses. To overcome these issues and instantly validate authenticity of cheques, digital signature and data encryption is used coming with blockchain technology. So entirely electronic based cheques, digital signature verification is instant and delivering cheques to the end recipient can have many different logistical modes.