Are cheques dying out?

The days of the cheque book may be numbered in Malaysia and Singapore too, if this latest development from the United Kingdom is anything to go by:

Sky News reported yesterday quoted the UK’s Payments Council as saying that cheques would be phased out by 31 Oct 2018. The 15-strong body, comprising members of the banking industry, said cheques were in “long-term, terminal decline”. Cheque usage has been falling by around 10% a year as debit cards gain ascendancy. Nevertheless, some four million transactions a day are still being carried out by cheque.

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

The Payments Council has faced opposition from businesses and charities who argue that they will lose out when individuals can no longer use cheques for payments or contributions. However, it vowed to work over the next nine years to “promote and explain” alternatives. “The Board will be especially concerned that the needs of elderly and vulnerable people are met,” the Council said.

According to the UK’s Federation of Small Businesses, the decision to phase out paper payments would impact heavily on small businesses and their customers. The needs of the elderly and the disabled must also be considered, the charity Age Concern warned, adding: “Chip and pin is problematic for many older and housebound people and we know 6.4 million over 65s have never used the Internet. Without cheques, we are very concerned people will be forced to keep large amounts of cash in their home, leaving them vulnerable to theft and financial abuse.”It’s learnt that cheques are already very infrequently used in countries such as Sweden and Norway, and their use is under review in Ireland, South Africa and Australia. In Britain, cheque use peaked in 1990 when an average of 10.9 million cheques were issued per day. By 2008, there were just 3.8 million a day.