Cheques to be phased out in 2018 Cheques to be abolished if alternatives are found

16 December 2009

Paying for goods and services by cheque will be impossible after 31 October 2018, if an announcement made today by the UK Payments Council comes into force.

The Payments Council Board has selected 31 October 2018 as a target date for closing down the central system that processes cheques, provided that adequate alternatives are available to cheque users by then.

Cheques were first used in the seventeenth century in Britain, but the number of people writing them has fallen by 40% over the past five years.

However, while the Payments Council argues that cheques are ‘in long-term, terminal decline’, it acknowledges many small businesses and consumers still prefer using them to making debit or credit card transactions.

Alternatives to cheques

The Payments Council says it will ‘seek to promote and explain’ existing alternatives to cheques over the next nine years, aiming to ensure that by 2018 ‘there is no scenario where customers, individuals or businesses still need to use a cheque.' 

The most popular alternative to paying for an item by cheque is to do so using a debit card, although the rise of internet banking has also contributed to their decline.

Paul Smee, Chief Executive of the Payments Council, said: ‘There are many more efficient ways of making payments than by paper in the 21st century, and the time is ripe for the economy as a whole to reap the benefits of its replacement.’

Protecting cheque users

The Payments Council Board says it will focus especially on the needs of elderly and vulnerable people to ensure their needs are met. Mr Smee commented: ‘There will be a critical review in 2016 when the Payments Council will decide whether sufficient change has occurred against agreed published criteria, to press ahead to do away with the cheque in 2018.’

However, Which? personal finance campaigner Vera Cottrell said: ‘It is wrong to set a firm end date for the cheque before the banking industry has actually come up with alternative payment methods that are cheap, safe and easily accessible – and which are suitable for those people who currently rely on cheques.’

To find out more about alternatives to cheques, read the Should I bank online? advice guide. Meanwhile, the Your rights when paying by credit card guide contains crucial information about the benefits of paying with plastic.

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