Banking industry still seeking cheque alternatives
The banking industry has announced that alternatives to cheques are still being sought.
The announcement comes after the UK Payments Council voted to phase out cheques on 31 October 2018, but stated that cheques will not be phased out until an “accessible and acceptable” alternative payment system is introduced.
Cheque usage continues to decline as consumers opt to use debit cards or other quicker payment methods.
Figures show it costs up to £1 to process a cheque – four times more than it costs to handle an electronic payment and the move will save banks hundreds of millions each year.
However, a new “paper-based” method of payment is being considered to replace cheques, according to the industry.
The Payments Council has come under pressure to introduce alternative methods – particularly by consumers groups and charities, who have expressed concern for the elderly if cheques are abolished, suggesting that it will result in them hoarding cash at home.
Paul Smee, chief executive of the Payments Council, pledged: “Cheques will continue until alternatives are in place.”
Cheques are still used for payments to sole traders, small businesses, clubs, charities and schools and despite the decline in usage, millions are cheques of written every day.
In the meantime, research by the Payments Council revealed that more than half of people are unaware that cheques will be phased out in 2018.