Worrying or not? Cash will be next! ........................... The death of the cheque: celebrations for 350th anniversary marred by plans to kill off cheque payments
As one banking organisation celebrates the 350th anniversary of the cheque, another is deciding when to kill it off as a method of payment.
On Monday, 16 February 2009, the Forum of Private Business (FPB) attended a meeting at the Bank of England Museum, 350 years to the day since the first cheque was signed. It was organised by the Cheque and Credit Clearing Company, which has commemorated the occasion in a report charting the life and times of the preferred method of payment for small businesses. Amid the celebrations, the FPB is warning that the Payments Council is preparing a ‘roadmap’ that is likely to decide when the cheque will be abolished.
The FPB was consulted over the Payment Council’s National Payment Plan, in which it agreed not to phase out cheque payments until alternatives – including debit cards and automated payments, such as Direct Debits and standing orders – are made viable payment methods for small businesses. However, the FPB is concerned that setting a date for abolition would compromise this strategy.
"Even in a world filled with electronic telecommunications, many small businesses still rely on payment by cheque. Holding back the planned phase-out until viable alternatives are in place, and until businesses and consumers decide it is time to the withdraw the cheque-clearing service, would be the sensible approach," said Phil Orford, the FPB’s Chief Executive. "The FPB is advising its members to explore alternatives, and calling on the Payments Council to help provide the information and support that is needed for a smooth transition."
In a survey by the FPB, almost three-quarters (73%) of respondents stated that ‘customer forces' should determine the rate at which payment by cheque be phased out. Further, nearly half of all respondents (48%) were concerned that removing cheque payments within the next seven years would harm their businesses.
According to the survey, respondents claimed to receive 72% of their payments from other businesses by cheque. More than half (55%) of the small businesses surveyed said they regularly pay other businesses – including suppliers, utilities companies and insurers – by cheque.
The Payments Council is likely to propose phasing out cheques by 2018. The Payments Council is likely to propose phasing out cheques by 2018. Although small businesses want market forces to dictate the death of the cheque, 62% of respondents to the FPB’s survey, which was carried out in 2007 in response to the consultation exercise, acknowledged that 2018 would be a ‘reasonable’ date for the complete phasing out of cheques, as long as viable alternatives are in place.
18 Feb 2009, 12:55 PM
To be expected I suppose.
In my field, building, It is difficult enough getting payments from other businesses as it is but doing away with a common and simple payment method is going to make it easier - not!
18 Feb 2009, 7:08 PM
I'm amazed that cash has not been banned yet! It must really nag at the government that people can swop notes for goods without some sort of record being passed from computer to computer.
24 Feb 2009, 8:55 PM
abolish cheques now!!! i work for a small building company and we have always been payed weekly by a cheque sent to our banks/building societies, as the firm is owned by 2 owners the cheques hav to be signed by both, this would be fine in most cases but 1 of them likes to play golf most days of the week and therfore signs the cheques when he can! this makes the whole process fall behind! plus we hav had alot of cheques go 'missing' so we end up not being payed!!! it may be an idea to keep cheques but ban firms/work places from paying employes by cheque?!?
22 Nov 2009, 2:46 PM
I am well aware that the majoirty of people who make decisions on matters such as this dont even know their own pin as their secretary/PA does all that stuff for them. However when you assume that all transactions can be done via electronic means it means only one thing, you are never out in a field with the rain peeing down and settling up quickly before you get on your way. Virtually all payment I receive is through cheques. Quick simple needs no online technology, just a pen. If cheques go then it will simply mean that more people like me are paid in cash which surely cannot be in the best interests of HRMC.....
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