Partner Article

Cheques written out by 2018

Cheques will be phased out by October 31 2018, the UK’s Payments Council said today.

The payment method was first introduced 350 years ago but the body said cheque use was in “long-term, terminal decline”.

Chief executive 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.”

The council said it would promote alternative payment methods to ensure consumers were not left “high and dry” by the cheque withdrawal.

Cheque use has been in decline since 1990 and has gone down by 40% in the past five years, but the body said there were still “plenty of situations” in which cheques were used.

“The goal is to ensure that by 2018 there is no scenario where customers, individuals or businesses, still need to use a cheque,” it added.

While 2018 is the target date, there will be a review two years before to assess whether sufficient progress has been made, the body added.

On current trends, cheque use would decline to 1.6 million a day by 2018, from 3.8 million a day in 2008.

No major UK-wide supermarket chain accepts the payment method, nor do most petrol stations and high street stores, due to the relatively high costs of processing them - around a pound per transaction.

But the move to scrap cheques has raised concerns about the impact on, for example, smaller businesses and pensioners, where usage is higher.

The Federation of Small Businesses said the decision was “disappointing”.

“This will cause concerns for both a number of small businesses who do not have electronic payment systems and their customers. It is not for the council to do the bidding of the banks, which have been against keeping the cheque because of the cost incurred,” a spokesman said.

This was posted in Bdaily's Members' News section by Ruth Mitchell .