UK banks set to vote tomorrow to phase out 300-year-old tradition of paying by cheque
Do you pay the milkman by cheque? Slip a surprise cheque in a Christmas card to a grandson or granddaughter? Or maybe you simply don't trust direct debits when dealing with gas and electricity companies?
In the future you'll have no choice but to pay electronically, by plastic, or go online if, as expected, Britain's banks vote tomorrow to phase out the tradition dating back more than 300 years of payment by cheque.
Cheques cost up to £1 each to process – and the number written has been falling steadily. As recently as 2002 a typical consumer in Britain was writing 31 cheques a year, but the number fell to 14 by 2008. Big stores such as Marks & Spencer have already stopped taking cheques, and the Payments Council, which sets strategy for UK payments in Britain, says they are now used for fewer than one in 25 purchases.
Scandinavian countries and Ireland have already voted to phase out cheques, and a board meeting of the Payments Council tomorrow afternoon expected to set an 'end date' of 2018 for cheque clearing in Britain.
It wants consumers to switch to cheaper and faster electronic payment processing and says it will use the eight-year transitional period to ensure alternative arrangements are put in place.
'Mapping out how the UK might move to a society where, by 2018, there is no need to use a cheque for any type of payment is no small task,' said council spokeswoman Sandra Quinn. 'Even if the board decides to set a target date, we are clear that we would need to continue to engage with as many other bodies as possible to understand their concerns and requirements. The demise of the cheque in 2018 is only feasible if interim targets are set and met and it can be demonstrated that no one will lose out.'
But the phasing out of cheques has led to intense concern among groups representing senior citizens. Many elderly bank customers are unhappy about online banking, or have sight difficulties and prefer the comfort of using cheques.
Neil Duncan-Jordan, of the National Pensioners Convention, said: 'Using a cheque to settle your financial affairs is extremely important to older pensioners who might struggle in later life with the use of chip and pin. This option is effectively removing choice from a whole section of the population. The representatives of the Payments Council are completely out of touch with the needs of older consumers and need to think again.'
Age Concern and Help the Aged say that 6.4 million over-65s have never used the internet, and the loss of cheques will force older people to keep large amounts of cash at home, leaving them vulnerable to theft and fraud.
Andrew Harrop, head of public policy at the charities, said: 'Many older people rely on cheques as their main form of payment and will be very worried about how they will manage if they are withdrawn.
'Our fear is that setting a date will give the green light to banks and retailers to withdraw cheques even earlier than 2018, as some already have. It is vital that before cheques are phased out, the Payments Council ensures there is a practical, safe, paper-based alternative in place which serves the needs of this group.'
Small businesses point out that, despite the decline, there are still 1.4bn cheques written every year by individuals and businesses to pay bills, traders or family members.
Stephen Alambritis, of the Federation of Small Businesses, said: 'This sends completely the wrong message to the self-employed, small businesses and people who run small clubs and charities.
'We are opposed to the Payments Council dictating this, at the behest of the big banks, when cheques are still hugely popular as a method of payment. We know that students and young adults are using the chequebook less and less, and the banks talk about things such as cheque fraud. But it is terribly wrong to set any date as to when they can no longer be used. They are also an important record of transactions for small businesses.'
But Quinn said that most under-30s now barely use cheques, while the under-20s have barely heard of them.
She added: 'So far, no group consulted has said 2018 is not feasible although all parties recognise that it would be a major challenge to get right and that currently sufficient and accessible alternatives to cheques do not exist for a number of individuals and users.'
The Payments Council board is made up of 16 directors, 12 from the banks and four independents. The independent directors enjoy a power of veto, but are not expected to impose it tomorrow.