What initiates the cheque clearing process?

The initiation of the cheque clearing process begins when the payer writes a cheque and presents it to the payee. This action marks the point at which the transaction is formally recorded, as the cheque serves as a promise from the payer to transfer a specified amount of money to the payee's account.

At this stage, the payee receives the cheque and typically deposits it into their bank account. This is crucial as it starts the flow of the cheque through the banking system, leading to the subsequent steps of clearing and settlement. The other processes, such as the financial institution presenting the cheque for collection and the payee crediting their account, occur after this initial step. Therefore, writing the cheque is foundational to initiating the entire clearing process.