Chequing out for the last time?

UK banks are expected to soon announce that 2018 will herald the end of cheques.

Cheque Guarantee cards are already set to disappear in 2011 as part of what the industry payment council (APACS) calls a “managed decline” of paper-based cheques. UK banks will now vote on 16 December on when to abolish cheques, with an announcement expected in January. The date being most heavily expected is 2018.

With cheques costing around four times as much as electronic payments, the move could save banks hundreds of millions in costs a year and is inevitable according to Stephen Whitlam of Expense Reduction Analysts. “Only 3% by value of retail spending is now undertaken by cheque and their volume has declined by 66% in just 20 years. Whereas plastic cards and electronic settlements are on an exponential growth curve. The unit overhead cost to banks is already £1 per cheque and as volumes decrease further, that burden will increase. It’s the end of the road for paper based payments; but gratifying that the industry will foreshadow a generous time for companies to identify replacements”.

Paul Smee, chief executive, Payments Council, told the Sunday Times that no groups consulted have said a 2018 deadline is “not feasible”. A source also told the paper that the only possible reason for delay is political because of the current unpopularity of banks.