Fri, 18 Dec 2009

Getting rid of cheques

The UK Payment Council this week announced a plan to abolish cheques in less than a decade. Actually, it is the clearing of cheques that would be closed on October 31, 2018, but that is as good as abolishing cheques themselves.

The report points out that “A number of countries including The Netherlands and Sweden have already largely or totally eliminated cheques. However volumes of paper credit payments in these countries remain significant. The cheque replacement programme in the UK would be going beyond these countries in aiming to modernise the payment system ...”

The usage of cheques in the UK peaked nearly two decades ago in 1990 and has been falling relentlessly since then. “Cheque use is in long-term, terminal decline.” The UK therefore proposes to shift remaining users of cheques to paperless channels (ATMs, mobile banking, internet banking and stored value cards) over the next decade and then get rid of cheques completely.

The report has a section on “cheque dependent consumers.” This group consists mainly of individuals with degenerative conditions and individuals living in care homes or with mobility problems. The main advantage of cheques is that they allow third parties to assist the user by filling up the cheque before the user signs the cheque. My own sense is that biometrics would be safer than reliance on a third party in such situations.

Interestingly, the report also discusses a few UK statutes which do not allow any alternative to paper payment – these include penalties for dog fouling, litter, releasing greenhouse gases and cigarette smoke.

Posted at 21:34 on Fri, 18 Dec 2009     1 comments     permanent link

Comments...

Mcx Tips wrote on Fri, 22 Oct 2010 12:58

Re: Getting rid of cheques

There are some drawbacks with cheques like the long clearing cycle means that those receiving a cheque can wait up to 10 days before funds are cleared into their account. And there is an inherent uncertainty about cheque payments, with banks able to cancel "bounced" or fraudulent cheques after the sum of money appears to have been paid into the recipient's account.

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