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18th of July 2011
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Cheques to be phased out by 2018

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by Kay Mitchell
”Cheques

The UK Payments Council has today voted to phase out cheques on 31 October 2018, but has pledged to “promote and explain” alternatives over the next 9 years.

The use of the cheque book has been in decline for many years as consumers opt for quicker payment methods.

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.

However the Payments Council, which oversees payments strategy, has stated that cheques will not be phased out until an “accessible and acceptable” alternative payment system is introduced.

The Payments Council accepted that cheques were still used for payments to sole traders, small businesses, clubs, charities and schools.

The scrapping of the cheque book has not been welcomed by charities which represent older people.

Andrew Harrop, of Age Concern and Help the Aged comments: “We are concerned that this [decision] will give the green light to banks and retailers to start phasing them out even sooner [than 2018].”

“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,” said Mr Harrop.

In a statement today, the Payments Council said: “The goal is to ensure that by 2018 there is no scenario where customers, individuals or businesses, still need to use a cheque.”

“The board will be especially concerned that the needs of elderly and vulnerable people are met,” added the statement.

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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News posted: December 16, 2009

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