Cheques to be phased out by 2018

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The body that oversees the strategy for making payments in the United Kingdom announced that cheques, which are still written at a rate of 3.8 million per day, will be phased out of use by 2018.

The Payments Council said the move, which will save the banking industry nearly £600m per year, was necessary after a steep decline in cheque usage since its peak in 1990, when 10.9m cheques were written each day.

A succession of retailers, including all UK-wide supermarket chains along with most petrol stations and high street stores, have stop accepting cheques because of their high processing cost compared to debit cards.

Cheques cost around £1 per transaction to produce and process, compared to the 15 million daily debit card payments which cost less than half that amount. Cheque use has declined 40 per cent in the last five years. They are now used in just 3 per cent of retail transactions but cost £1.4bn a year to process. By 2018, the annual cost will have fallen to about £580m.

The Payments Council, which is funded by the banking industry and organisations responsible for money transfer systems, it making the announcement to ensure that a viable replacement to cheques had been introduced by 2018. The decision will be reviewed in 2016 before a final go-ahead to shut down the cheque clearing system is given.

Paul Smee, the council?s chief executive, 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.

?Customers aren?t likely to see any immediate change as the target date is still a long way off. This announcement marks the start of extensive work that we need to do to ensure that everyone has a viable alternative.?

Since the first British cheque was written by Mr Van Acker on 16 February 1659, most inside the banking industry agree that cheques, a method of payment that dates back to the Roman Empire, are in terminal decline, the announcement of a compulsory end to their use provoked unease among groups that remain reliant on their use.

The elderly remain the heaviest users of cheques, in particular to receive sums of money. While the average 25-year-old will receive two cheques a year, those over 65 will get four. More than half of adults, some 54 per cent, still write cheques.

Andrew Harrop, head of public policy for Age Concern and Help the Aged, 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.?

Banking industry insiders said alternative methods already existed for making the payments where cheques are currently preferred, such as for homeowners paying tradesmen or parents paying for school meals.

A source said: ?Everyone knows cheques and is used to them but we are talking about a 300-year-old technology. This will be as much about raising awareness of existing alternatives as finding new methods.?

The number of ?Faster Payment? direct transfers between bank accounts, where money can be sent instantly using a recipient?s account number and sort code, now runs at one million per day.

Postal orders remain popular

While cheques may be going the way of gold sovereigns as a way of paying for everyday goods, the Post Office postal order remains in rude health.

The Royal Mail said today that while the quantity of postal orders being bought has remained steady, the overall value of sales has risen considerably in recent years.

The Post Office, which will not disclose the total value of postal order transactions, is considering a campaign to try to widen the use of postal orders, which unlike cash sent in the mail can be cancelled automatically and the money refunded to the sender.

A Royal Mail spokesman said: "There has been a sigificant increase in the values of the postal orders we are selling. They remain very popular and we certainly have no plans to discontinue them. Indeed, we are looking to increase their use."

[ziko]

Eventually cash itself will be 'phased out' and we will be left with digital plastic - the government will know your every single purchase, lifestyle choice and movements and will have direct access to trillions+ of information on your every choice in life and use this statistical data to predict with eerie accuracy your moves before you've even made them yourself - Bravenew world. Take the current situation with Royal mail for instance it is in the governments interests security wise and financially for everyone in the country to stop writting letters and instead use their personal computer to send 'emails' via the web. We pay our bills online, we shop online, we communicate online, we watch tv online, we now spend more time infront of a computer than at any point in history. I ask you has the government started a properganda mission to phase out TV's? the answer is no, We still communicate using the Royal mail at the moment and this is what the government want to get their hands on 'information.' You are being watched all the time - literally ! If you dont believe me then why do we have more security cameras per sq ft than any other country? Oh, i see its for our own safety the government are nice and kind and are looking after us. Thats why the Royal mail will, with time be privatised. Mandelson Knows this and by 'assisting certain powers' he is only speeding up the process and inturn cutting himself into history and making a nice few quid on the side for himself. He is not the bad guy we are, for never standing up to the machine.
Cheque please.