Cheques won’t be phased out until viable alternative found


Cheques are to remain until another payment method is put in place by the Payments Council.

Paper cheques will not be abolished until a new system is taken up by consumers.

The Payments Council has stated that cheques will only be phased out once an alternative method of payment becomes “available, acceptable and widely adopted”.

Another ‘paper-based’ system may be introduced instead, to help groups, such as the elderly, who struggle with using electronic methods to make payments or haven’t adopted using telephone and internet banking facilities yet.

A voucher scheme is being discussed amongst other possible electronic routes. One idea is to use mobile phones to send payments through text message or use them as debit card readers.

The Council has planned to close the cheque clearing system by 2018 if a popular alternative is found but has admitted that it has set itself a “massive challenge”.

National chairman of the Federation of Small Businesses (FSB) John Walker said: “The FSB is pleased that the banks are looking at an alternative paper-based system to replace the cheque. Cheques are vital to the way many consumers and businesses operate, and with millions of cheques written every day, many small businesses will be disadvantaged – especially in rural areas – if the cheque is to be completely abolished”.

Michelle Mitchell from Age UK was concerned about the effect of the proposed changes on the elderly. She said: “The announcement does nothing to reassure older people that an acceptable alternative payment system will be in place before cheques are withdrawn. Cheques should remain available to all customers until an acceptable alternative which meets the needs of all who rely on cheques is in operation”.

Research carried out by the Council has shown that 55% of people do not know that cheques may be gotten rid of in 2018. A quarter of those who are aware of the plans to abolish the traditional payment method incorrectly believe that it will occur next year.

However, cheques will no longer be guaranteed by plastic guarantee cards from the end of June 2011 but they will still be perfectly acceptable to use for the next few years.