Businesses demand we keep cheques

The Cheque & Credit Clearing Company (CCCC) released details of the latest research results into Britain’s attitudes towards cheques at their conference this week.

The survey was split into two parts and is released annually.

The first part looks at consumer attitudes, and the second into business views. Here’s the latest:

Consumer views on cheque usage

This year’s survey covered 2,000 adults in May 2009, and builds on previously research in May 2008 and 2007.

60% of consumers write cheques and around 55% receive cheques, a level that has been stable for the past three years. Nevertheless, the usage varies widely by age group as 25-34 years olds claim to write about 4 cheques per year and receive 3, whilst over 65’s write 11 and receive 4 on average*.

Consumers mainly use cheques for bill payments by post, but also to pay for work on their house, paying friends and family and for joining local clubs and associations.

Interestingly, less than half (48%) of consumers could think of a good, convenient alternative method of paying instead of a cheque in these instances.

The biggest area of reduced cheque usage is in retail shopping where debit and credit cards have taken over. As a result, only 3% of consumers would think about writing a cheque in a shop, compared to 8% two years ago.

Bearing in mind the Payments Council wants to eradicate cheques entirely within eight years, the resistance will still be great. As mentioned yesterday, the usage of cheques in Britain has gone down but it is still 1.4 billion payments transactions per annum today and is expected to continue to be about 600 million transactions even in 2018.

According to the consumer survey, 58% of consumers would have a problem with getting rid of cheques therefore (down from 65% two years ago) and 1 in 5 would have a major issue with its withdrawal.

The second part of the survey looked at business attitudes.

This is the second survey CCCC have performed with businesses, canvassing 500 business users in March 2008 and June 2009.

These results are also intriguing.

89% of businesses make payments by cheque, averaging 22 per month (down from 26 per month last year); and 84% receive cheque payments (88% in 2008). Only 7% had not made any cheque payments (up from 4% in 2008).

The business usage is also worth noting.

Most use it for payments of suppliers and ad hoc payments, primarily to improve their cashflow (a big spike up on this one from 37% in 2008 to 48% 2009). Several; also reference that it is to control payments as the sign-off process is clearly with the business owner and a number of people think it is better because the cheque may not get cashed or take longer so the float is better.

As a result, over 80% of businesses would have an issue if cheques were withdrawn and a third would have a major issue.

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* This is incredibly low compared to America, where the number of checks paid in the United States has fallen from 42 billion in 2001, to 37 billion in 2003 and to 30 billion in 2006, but it still means that this equates to 100 cheques written by every man, woman and child in America each year (will America ever get Chip & PIN and eradicate cheque usage?).