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Australia to kill cheques by 2030

Australia to kill cheques by 2030

Australia will phase out cheques by the end of the decade, citing their dwindling popularity in the face of a range of electronic alternatives.

With cheques now making up just 0.2% of non-cash payments in Australia, the federal government says it will stop using the antiquated instrument by 2028 and wind down the whole system by no later than 2030.

Treasurer Jim Chalmers says: "We know that usage of cheques has been declining. This is largely because digital transactions are easier, cheaper and more accessible. In fact, 98% of retail cheques could be serviced through internet or mobile banking."

The move will ensure greater efficiency, productivity and security" in Australia’s payments system, says the government in a strategic plan.

Elsewhere, the plan outlines a phase out of the Bulk Electronic Clearing System (BECS) and a full transition to the New Payment Platform (NPP), work to maintain access to cash, and exploratory work on a possible CBDC.

The move has been welcomed by the Australian Banking Association, with CEO Anna Bligh saying: “Payments are the lifeblood of our economy, but Australia is currently using a 60-year-old system for many everyday consumer and business payments.

"The Treasurer has today set out the strategic direction to move our economy away from this system and transition fully to the real time payments platform, built by Australian banks in 2017. This strategic direction will help focus investment in payments technology and infrastructure that will benefit customers into the future.

“With cheques now in steady decline and accounting for only 0.2% of all payments, it’s time to have a smooth and well-planned process to phase out this form of payment."

The government is also launching a consultation on a new licensing framework for payment service providers.

Rehan D’Almeida, GM, FinTech Australia, welcomes the framework: "Historically these regulations were not fit-for purpose as they rigidly restrict access to payment systems, meaning competition is slowed and innovation is frozen out.

"This latest framework rectifies this, giving a clear direction to the sector's regulators, RBA, APRA and ASIC, to allow for fair and equitable access to payment systems for compliant fintech companies."

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