Brits ditch cheques as Fast Payments gathers momentum

Brits ditch cheques as Fast Payments gathers momentum

The total value of cheques cleared in the UK in the second quarter fell a massive 20% compared to the same period in 2008, as Brits continued to turn to debit cards.

According to the UK Payments Administration, the value of all cheques cleared, including those issued by companies, fell by 20.9% to £219.23 during the quarter. The actual number of cheques cleared was also down 13.7% on Q2 2008.

Cheques - which are set to be phased out in the UK by 2018 - accounted for just 7.8% of all non-cash payment volumes in the quarter, declining from 19.7% in Q2 2003.

As the use of cheques continues to dwindle, plastic is becoming ever more dominant, with spending on cards up three per cent to £95.5 billion.

However, spending on credit cards was actually down on Q2 2008 by one per cent. In contrast spending on debit cards was up 7.3%, and now accounts for 74.7% of all plastic purchases.

Meanwhile, the much-maligned Faster Payments Service, continued to gather momentum, processing 69.3 million payments to a value of £25.1 billion in the second quarter of 2009. By the end of Q2 2009 almost half of all standing orders and 70% of phone and online banking payments were made using the service.

This week, VocaLink and PricewaterhouseCoopers published a detailed research report into the Faster Payments Service. Two-thirds of banks interviewed were very positive that FPS could deliver new revenue streams, with potential revenues identified in the business-to-consumer segment reaching £2.9 billion by 2018 and £1.9 billion in the business-to-business space.

Comments: (1)

A Finextra member
A Finextra member 21 September, 2009, 09:18Be the first to give this comment the thumbs up 0 likes

This is probably exacerbated due to the fact that some stores (certainly in the UK) now no longer accept cheques as a form of payment.