Cheque mate?

The Payments Council announced late last year cheques are to disappear in the UK by 2018. To most people this might feel like a case of, so what? Particularly for corporates, where the use of cheques is dramatically less than say a sole trader or SME. So what impact will this have for corporates?

Companies of all sizes will be affected in some way or another by the removal of cheques, even if this is only a cultural impact as opposed to a business impact. One thing that must be remembered is the cheque is still a legitimate mechanism to make certain types of financial transactions and still remains the only secure way to send payments in the post.

For corporates, BACS is readily available, but how many companies want the option that an immediate electronic payment brings? The cheque, because it is paper based and manual is seen as something you can ‘legitimately’ delay, which again goes back to the cultural change that will need to take place for cheques to be removed successfully.

With many companies already using automated cheque printing solutions, the reason for migrating from two payments systems to a simple system e.g. BACS, is the efficiency that can be gained including the removal of the additional capital and costs associated.

Projections show that in 2018 there will be an estimated 600 million cheques being written compared with 1.4 billion in 2009, these statistics alone suggest that cheques might be becoming less popular, but could still be in use around the Payments Council deadline in 2018.