UK banks set to vote on abolition of cheques
23 November 2009 | 12852 views | 3
The UK's major banks are set to vote next month on whether to stop clearing cheques as consumers increasingly turn to cards and electronic transfers.
Last May, the Payments Council delivered its first national payments plan which includes proposals for the "managed decline" of paper-based cheques.
During the public consultation the Council had suggested that cheques be phased out by 2018, but this was dropped in the final plan over concerns about the setting of an "end date".
The Council's members - banks - will now vote on 16 December on whether to abolish cheques, with an announcement expected in January.
With cheques costing around £1 to process, four times as much as electronic payments, the move could save banks hundreds of millions a year.
Paul Smee, chief executive, Payments Council, told the Sunday Times that no groups consulted have said a 2018 deadline is "not feasible". A source told the paper the only possible reason for delay is political because of the current unpopularity of banks.
In a statement, the Payments Council says: "Even if the Payments Council Board decides to set a target date, we are clear that we would need to continue to engage with as many other bodies as possible to understand their concerns and requirements. The demise of the cheque in 2018 is only feasible if interim targets are set and met and that it can be demonstrated that no-one will lose out."
The decline of cheque use in the UK has been widely documented. According to Apacs, only £7.1 billion (three per cent) of retail spending was by cheque in 2008, a 4.1% decline on the previous year. The number of cheques written has fallen by nearly two-thirds in the past 20 years, to 3.8 million a day.
Supermarkets Sainsbury's, Morrisons, Asda and Tesco along with retailers Boots and Marks and Spencer, are either phasing out or have already stopped taking cheques.
In June, the Payments Council set a two-year deadline for the withdrawal of the Cheque Guarantee Card Scheme. The Scheme sets the rules for the use and acceptance of guaranteed cheques and uses a depiction of Shakespeare on participating plastic cards as a common identifier.