Could Cheques be a Thing of the Past?

17 December 2009 - Mark Maffia

    



Could Cheques be a Thing of the Past?

Today, ever more financial products are hitting the market, pushing outdated ones to the corner.  New loan types, credit cards and even the newest payment method, the prepaid card, are all taking over leaving products like the humble cheque forgotten.

Now, it is expected that cheques may actually be phased out in favour of electronic payments.  Those most likely to be affected will be the elderly and small businesses, some of whom still rely on the cheque system.

A special panel made up mainly of banks, called the Payments Council, will take a vote next week on a possible end date for cheques and many expect that this will be set for within the next eight years.

Many people may hardly notice the difference, having come to rely on quicker systems like credit and debit cards, yet there are still nearly 1.5 billion cheques written every year in the UK.  They are used for things like paying bills, rent, traders or family and friends.

However, the Payments Council wants to urge people to move with the times and use more modern methods of making payments like internet banking and Paypal accounts. 

Indeed, according to bank it costs much less to process electronic payments than it does to process a cheque.  Each cheque that is paid can cost the bank up to 1 a go.

Charities and consumer groups who work especially for the elderly are crying out, saying that phasing out cheques means elderly people will be forced to use payment systems that they are not comfortable with. 

Not only that, but elderly consumers could be at higher risk of fraud when using systems which are new to them, such as online banking.  Those that have difficulties with their memories already find it hard to remember their PIN code for chip and PIN payments.

The majority of high street retailers oft used by elderly as well as other age group customers have already stopped accepting cheque payments.

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