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I think you're absolutely right in that cheque withdrawal can be done on a per product basis. Maybe the place to start is with student accounts. Since younger people hardly know what a cheque is, there's an opportunity to avoid introducing them to the idea
in the first place. The next logical opportunity would be accounts marketed as direct. Conversely, retention of cheques could then be come a feature of products aimed at those still attached to the idea.
Nice blog Andy. Yes, it would be altogether healthier and more transparent if UK banks charged for the various services they provided including cheques and current accounts. This is what seems to happen in most of the rest of the world and also for business
accounts here in the UK. But as you say, now the genie is out of the bottle it is very difficult to get it back in and a bank would need to be very brave to break ranks. Having said this, I notice that Santander is charging £2 per month for an account which
offers benefits such as chargebacks - maybe this is the way to go.
When faced with declining interchange revenues post Frank-Dodd-Durbin, AmEx and a couple of other banks - albeit in the USA - did bite the bullet by trying to charge for debit cards. That they faced tremendous consumer resistance and were forced to roll
back their plans is true but the incident does prove that banks don't shy away from levying explicit / implicit fees to recoup rising costs. But, they're still not doing it for checks. Wonder why. Something tells me that by merely levying fees for check usage,
banks won't be able to reduce its consumption significantly. Personally, I believe that most ePayments still have too much friction for the average man on the street to forego the convenience of checks even if the latter attract fees. My belief is reinforced
by the decision of ING Direct to actually introduce checks for Internet-only accounts.
Barclays' PingIt is surely a step in the right direction and I look forward to seeing some figures on how many people it has prevented from writing checks.
02 Dec 2010
This post is from a series of posts in the group:
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