End of the road for cheques?

Covered mag, presented by Gocompare.com
  • | by Kristian Dando

Cheques will be made redundant in Britain by October 2018 if recommendations by the UK Payments Council, the body which sets the strategy for UK transactions, are to go ahead.

The organisation deems cheques to be in “terminal decline,” wants momentum for the development of alternative payment methods to pick up. It believes the 2018 date will help kick start the process, but admits that it faces “a massive challenge.” Spokesman for the UK Payments council, Paul Smee said: "There are many more efficient ways of making payments than by paper in the 21st century, and the time is ripe for the economy as a whole to reap the benefits of its replacement.” He added: "But the real challenge lies ahead if we are going to be comfortable to wave good-bye to the cheque, which undeniably occupies a unique place in British culture. I know that the board will pay particular attention to check that the needs of disadvantaged consumers are addressed. As a result, a final review will take place in 2016 to announce whether to give the go-ahead for the end of cheque use."

Alternatives to cheques include bank transfers by mobile phone text messages, as well as the debit card. Many retailers, including supermarkets and petrol stations, have already phased out cheque use. But while it’s certainly true that cheque usage has declined thanks to the rise of direct debit, internet banking and chip-and-pin, organisations like the Federation of Small Businesses (FSB), Age Concern and Help the Aged are amongst the voices which have strongly opposed the move. Spokesman for FSB Stephen Alambritis questioned the motives of the proposal. “

"This is driven by the big banks, who will save over £1bn by the demise of the cheque." Meanwhile, age campaigners drew attention to the fact that the over 6.5 million over 65s have never used the internet, and there was a strong possibility that an end to cheques could cause senior citizens to withdraw large amounts of cash.