Source: Payments Council
With less than six months to go until the closure of the Cheque Guarantee Card Scheme, new research shows that 4 out of 10 people are still unaware that the Scheme will be closing on 30th June this year. After this date it will no longer be possible to guarantee a cheque up to a specified limit by handing over a plastic card carrying Shakespeare's logo - the Scheme identifier.
Although many consumers and businesses don't use the Scheme, banks and building societies are contacting their customers between now and the end of June to make sure that everyone is aware of the withdrawal date; but also to remind them that despite the Scheme's closure they can still continue to write and accept cheques. The Scheme's closure has no bearing on the Payments Council's longer-term project to set a target date of 2018 to close the central cheque clearing.
Latest research shows:
*71% of all cheque card holders report that they have either never used (22%) the guarantee facility on their card to guarantee a cheque or they used it more than a year ago (49%).
* By end-2010 fewer than three-quarters of debit cards had the cheque guarantee function denoted by Shakespeare's logo. Some customers will have new cards sent to them without the logo before 30th June and others will be changed on renewal.
*It is estimated that only a quarter of all businesses (under 350,000) have accepted a cheque guaranteed by a card in the last six months.
Jacqui Tribe, manager of the UK Domestic Cheque Guarantee Card Scheme says:
"Over the next five months banks and building societies will be working hard to make sure that everyone who is still guaranteeing cheques with a plastic card is made aware of the change, but also to make it clear that they will still be able to use and accept cheques.
"Perhaps more importantly, banks will be contacting those small businesses that they know may still accept guaranteed cheques to explain what options they have after 30th June. Obviously one of the main options will be to continue to accept a cheque."
The decision to close the Scheme was taken by the Payments Council as guaranteed cheque use is in terminal decline - an inevitable result given many retailers no longer accept cheques. When the Cheque Guarantee Card Scheme was introduced back in 1969 the payments landscape was very different. Credit cards and automattted payments were in their infancy and debit cards didn't exist. By 2009, under 7% of the 1.3 billion cheques written during the year were guaranteed.
Following consultation with representatives of guaranteed cheque users and detailed market research, the Payments Council concluded that it was in all parties' interests to manage the Scheme's demise in a coordinated fashion. This does not mean the end of cheques as businesses will continue to be able to accept them and customers will still be able to write them, just without the use of a guaranteed card.