Have we seen the end of cheques?


Will we write cheques or won’t we?

There has been confusion about cheques so we bring you the latest information.

Banks do not like cheques as they are expensive to process, and most personal bank accounts do not have fees included to cover the cost. My business bank account charges me £0.70p to write a cheque and £0.30p to receive one.

The intention was to drop cheques by 2018.

What has happened is that the cheque guarantee scheme came to an end on 30 July 2011. Remember you used to hand over your debit or credit card and the number was written on the back of the cheque. The scheme was intended to give retailers confidence the cheque would not bounce. No replacement scheme has been put in its place. Retailers often insist on cash or card because they know the transaction is complete.

The banks told us they were to phase out the use of cheques, but there has been a change of mind due to protests. We do not all like to bank online, or use plastic cards and PIN numbers. Many of the concerns have been taken up by AGE UK, which is a charity voicing the concerns of the elderly.

The answer to concerns came from the Payments Council which told us the 2018 deadline for doing away with cheques was not to be imposed.

Richard North, the Chairman of the Payments Council said:

“It’s in the DNA of the Payments Council to consult and listen to all those people who actually make payments and use cheques. Listening to over 600 stakeholder groups, working with the banks and following our appearance before the Treasury Select Committee, we have concluded we should reassure customers that the cheque is staying.

“Over the last two years we have learnt a great deal about what is important to our many stakeholders and we are really grateful to all of those groups and individuals who took the time to talk to us and help us reach this decision. We will use what we’ve learnt to keep improving existing systems, as well as introducing innovation, so that customers benefit from 21st century ways to pay.  Innovation must be at the heart of what we do.”

So that looks fine, but of course without the cheque guarantee system will a retailer want to accept a cheque? For instance, do you know a petrol station which will accept a cheque?

“We need to know there are definite plans in place to restore trust in them (cheques)…otherwise, cheques will simply be allowed to wither away and their demise will be blamed on lack of demand,” says Michelle Mitchell, charity director of Age UK.

“Cheques are too important to many older people to just fade away, particularly as the banks and building societies have not come up with an alternative payment system which is safe and accessible and allows people to maintain their financial independence.”

According to Age UK, nearly three out of four people over 65 have used a cheque in the past 12 months. That figure is 60 per cent for the rest of the public.

Last month, Consumer Focus, the watchdog, also warned that the withdrawal of the guarantee card would lead to the “managed decline” of cheques.

‘The 2018 deadline may have gone but if the future of cheques is still uncertain, it is vital that the Payments Council continues to investigate alternatives that work for all consumers,” said Consumer Focus last month.

“Many retailers should now re-consider their decision to stop accepting cheques in the absence of workable alternatives for customers.”

Let us know what you think and get involved.