Future of the cheque book to be decided today
The use of the cheque book continues to decline as consumers opt for quicker payment methods and, as a result, the cheque clearing system could end by 2018.
Major retailers such as Tesco and Sainsbury’s no longer accept cheques, arguing that phasing out the use of cheques in stores resulted in quicker service and improved security for consumers.
Figures show it costs up to £1 to process a cheque – four times more than it costs to handle an electronic payment. The move will save banks hundreds of millions each year.
The use of cheques continues to decline as a result of online banking. Finland abolished the cheque book in 1993, while Sweden has also phased them out. However, they continue to be popular in France and the US.
However the UK Payments Council, which oversees payments strategy, said that cheques will not be phased out until an “accessible and acceptable” alternative payment system is introduced.
While banks are keen for cheques to be gradually phased out, the move has not been welcomed by the Federation of Small Businesses, who said: “We strongly oppose moves to get rid of the chequebook.”
Furthermore, charities representing older people have expressed their concern. Andrew Harrop, of Age Concern and Help the Aged comments: “Our fear is that setting a date will give the green light to banks and retailers to withdraw cheques even earlier than 2018, as some already have.”
In response, Sandra Quinn of the Payments Council, said: “We are completely aware that elderly, disabled and disadvantaged people need alternatives to be in place. If the decision is made [to end the cheque], there will be a long time before it comes into effect.”
Personal cheque payment volumes reached a high of 2.4 billion in 1990 but have gradually declined and fell to 663 million in 2008.
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