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18th of July 2011
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Cheques will not be scrapped, say Payments Council

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by Kay Mitchell
”Cheques

It has been announced today that cheques will not be phased out after the Payments Council announced it would abolish them in 2018.

The Council has now decided to keep them after criticism from MPs and charities and was forced to make the u-turn after pressure from the public.

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,” he added.

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 was expected to save banks hundreds of millions each year.

However, while a new “paper-based” method of payment was considered to replace cheques, the Council has now decided to keep cheques.

Consumers groups and charities have previously expressed concern for the elderly if cheques are abolished, suggesting that it will result in them hoarding cash at home.

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.

Cheques were first introduced more than 350 years ago but the usage of cheques has dived by 70% since 1990.

Retailers ceased accepting them at checkouts three years ago.

Commenting on today’s decision, Michelle Mitchell, charity director at Age UK, said: “We are delighted that the Payments Council has listened to the many people who said how difficult the loss of cheques would be for them.”

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