How did cheque clearing initially develop?

The development of cheque clearing is historically rooted in informal practices that evolved into more organized systems. Initially, banks would meet in coffee shops to exchange cheques, a setting that allowed for quick and convenient transactions without the need for formal structures. This practice was driven by the need for banks to settle their accounts and clear the cheques that had been deposited by their customers.

This informal approach laid the groundwork for the later establishment of clearing houses, where bank representatives could gather to process these transactions more efficiently. Over time, this evolved into the structured systems we see today, but the origins trace back to these casual meetings, illustrating how financial interactions often began in everyday spaces before transforming into more institutionalized practices. The other options reflect modern methods or are misaligned with the historical context of cheque clearing's evolution.