Cheques face deadline
(25 November 2009 – UK) The future of the cheque book will soon be determined when the UK’s Payment Council convene on December 16th to vote whether to abolish cheques due to the terminal decline in consumer use.
The Payments Council, an organisation that sets strategies for UK payments, delivered its first national payments plan in May last year.
The council suggested the ‘managed decline’ of paper based cheques by phasing them out by 2018; however the move was disregarded in the final plan due to concerns of an ‘end date’.
If the vote concludes the life of cheques it could save banks hundreds of millions a year, as the cost of processing a cheque is around £1 (A$1.79), four times more than electronic payments.
A number of major British retailers including supermarkets Sainsbury’s and Tesco’s have stopped accepting cheques or are in the process of phasing them out.
According to the Association for Payment Clearing Services (APACS), £7.1 billion of retail spending was by cheque in 2008, only three percent of all payments, and this figure represents a 4.1 percent decline on the previous year.
Paul Smee, chief executive, Payments Council, told the Sunday Times that no groups consulted have said a 2018 deadline is 'not feasible'.
The group was established to ensure that the UK payment systems and services meet the needs of users, payment service providers and the wider economy; the council is mainly compiled of bankers.
The council suggested the ‘managed decline’ of paper based cheques by phasing them out by 2018; however the move was disregarded in the final plan due to concerns of an ‘end date’.
If the vote concludes the life of cheques it could save banks hundreds of millions a year, as the cost of processing a cheque is around £1 (A$1.79), four times more than electronic payments.
A number of major British retailers including supermarkets Sainsbury’s and Tesco’s have stopped accepting cheques or are in the process of phasing them out.
According to the Association for Payment Clearing Services (APACS), £7.1 billion of retail spending was by cheque in 2008, only three percent of all payments, and this figure represents a 4.1 percent decline on the previous year.
Paul Smee, chief executive, Payments Council, told the Sunday Times that no groups consulted have said a 2018 deadline is 'not feasible'.
The group was established to ensure that the UK payment systems and services meet the needs of users, payment service providers and the wider economy; the council is mainly compiled of bankers.
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