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Mike, I too think the issue is more centred on consumers than corporates and that innovation is required.
OK, so corporates still use checks. But they are also best placed to go fully electronic, if they were really minded to. There are some weird exceptions but they tend to have a 'consumer' flavour (and result from the general absence of that alternative
instrument to pay someone - cash). Examples are (1) your employee has no bank account, so they need an instrument to go and cash (2) you need to make a small value payment there and then without going through a vendor set up routine.
It is for me consumers that need the check because it is a simple way of settling a liability without having to set up the payee electronically - basically; you sub contract all that hassle to the banks.
Imagine a window cleaner doing 50 jobs a week and charging 50 x £25; that's 50 electronic receipts of £25. But, if you only get 49 receipts just how do you find out who didn't pay? (I assume like the corporate world, a payment reference is unlikely) So,
generally, a check does the payment job and is also a remittance. (1) you have some certainty you have been paid and (2) you know exactly who paid you.
Innovation should do the job - I can see mobile phones / devices getting there in the main. A blocker will be consumer apathy - I just can't be bothered sometimes to trawl through all the detail, check and double check the information to make a payment.
Just stick a check in the post and move on.
Like you, I've worked in a professional capacity to provide ePayment solutions. However, when it comes to my personal life, I haven't found a more convenient alternative to checks because of the high degree of friction involved in most current forms of ePayments.
I've written about them on my personal blog on several occasions. Suffice to say that they revolve around inadequate field lengths for narrations, anxiety in entering the beneficiary account number, and so on.
Props for hitting the nail on the head when you say "The reason the UK initiative failed is because no adequate alternatives were developed." I've voiced a similar view on Finextra and believe that there's no point in blaming the common man for choosing
checks as the path of least resistance. I share your opinion that solution has to come from banks and payment solutions providers and not the government.
SVP Payment Services
02 Aug 2011
This post is from a series of posts in the group:
A discussion of trends in innovation management within financial institutions, and the key processes, technology and cultural shifts driving innovation.