Home / Future / End of the cheque: open outcry! (UPDATE)

End of the cheque: open outcry! (UPDATE)

The Daily Wail, Britain’s second largest daily newspaper after the Pun, has finally got wind of the imminent demise of the cheque, as discussed here the other week. This is because the banks vote soon as to whether 2018 is the year of its removal or not.

In their article, they have some good bits, such as these great factoids:

  • The ancient Romans are believed to have used an early form of cheque known as praescriptiones in the first century BC
  • The English word cheque comes from the Arabic sakk, which refers to a written note of credit used by Muslim merchants
  • The predicted number of cheques written per day in the UK in 2018 is 1.6m
  • The average value of a personal cheque payment is £227
  • The amount of retail spending still paid for by cheque is 3.9%
  • According to the Guinness Book of World Records, the largest ever oversized cheque was 12m by 25m (39 ft × 82 ft)

But then the main body of the article provides the usual unhelpful rubbish such as: "the move was criticised by consumer groups, business lobbyists and charities representing the elderly.  They raised fears that vulnerable people, who have relied on their chequebook all their lives, will be left confused."

This is even though the Payments Council's research proves this is not the case and, in reality, it is like reading an article calling for us to give up the internet and return to logarithmic tables.

No wonder the almost 300 comments from readers say things like:

"If so few cheques are now being written out then surely it isn't beyond
the wit and capability of the banks to be able to deal with them?"

"Of course they want to abolish cheques, why spend a £1 to process them
when they can charge us a couple of quid for a direct debit.
This will be the start, what next a £50.00 charge to open an account?"

"Electronic financial transactions are not secure, and the banks put the
onus on the customer to prove that they the customer are not the

"Without a cheque book I will no longer want a bank account, I will have
to revert to using cash everywhere, and go back to gettinng pension
from the post office in 'real' money."

What these comments demonstrate is that cheques may be a paper-based piece of ancient history, but it is not one that can easily be replaced by alternative means.

When you need to send a payment by post or are managing cashflow in a small business, the cheque is still the main method of payment and even with online and mobile banking, cards, PayPal and more, the cheque still has a place.

Until the banks provide a clear alternative, the arguments about the removal of cheque payments will continue.

More commentary today in lead opinion column by Rowan Pelling in the Daily Telegraph:

"My bank is always offering me indescribably useless "benefits", such
as insurance I don't need, to justify charges on an account that's almost
always in credit; now it's threatening to withdraw the one thing I find
indispensable … I just wish someone would set up a bank that gave you what you wanted: no fees
for those in credit, handsome chequebooks, like those you used to get from
Coutts or Drummonds, and freedom to phone your branch's manager directly.
There would be a stampede."

Plus top reader's letters:

SIR – Last week I found I had not received the new cheque-book that usually
arrives, so that I always have one to hand (Letters, November 24).

I phoned Lloyds, and was informed that it no longer sends out cheque-books
automatically, as many big firms were no longer accepting cheques. It was
the first I had heard of the bank's new policy and I asked for an objection
to be registered because:

1. Paying utility bills by cheque gives me control over the date of payment.
Where I have been forced to pay by direct debit I find it difficult to keep
a check on payments;

2. Cheques are the only way to make a safe means of payment by post;

3. Cheques save keeping large sums of cash in the house;

4. They are a simple way to send money to private individuals and small

Over the past two months, 20 out of 25 cheques that I have written have been
to private individuals and small societies.

Diana Morgan
Swanage, Dorset

SIR – I am very fond of my cheque-book but those troubled by their possible
demise should take heart.

When I lived in Amsterdam, I discovered that banks in the Netherlands do not
supply cheque-books. My initial consternation was won over by their simple
system of everyone from utility companies to charities supplying tear off
forms on bills and the like, which one sent directly to one's own bank,
asking it to make a payment.

This saves the roundabout method of writing a cheque, sending it the payee,
their sending it to their bank, that bank sending it to one's own bank and
the payment being made. It also removes the grey area of clearing, when
money is in limbo.

The banks could reject the payment directly if, as often in my case,
sufficient funds were not in the account.

If British banks abolish the cheque, could we not adopt a similar system?

Christopher Leach
London W11

SIR – I suspect that many a one-man business and their customers are looking
forward to the demise of cheques.

Just think of the income to be hidden and VAT evaded through payment in cash.

Patrick O'Hara
Arden, Warwickshire


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About Chris M Skinner

Chris M Skinner
Chris Skinner is best known as an independent commentator on the financial markets through his blog, the Finanser.com, as author of the bestselling book Digital Bank, and Chair of the European networking forum the Financial Services Club. He has been voted one of the most influential people in banking by The Financial Brand (as well as one of the best blogs), a FinTech Titan (Next Bank), one of the Fintech Leaders you need to follow (City AM, Deluxe and Jax Finance), as well as one of the Top 40 most influential people in financial technology by the Wall Street Journal’s Financial News. To learn more click here...

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  • Sven De kerpel

    Well, Belgium has abolished cheques over 10 years ago, while our economy did not come to a stand still, and our internet home banking applications are secure, and branch office have terminals where people can transfer money without using the internet and some even have telephone based services. At the same time our charges for an account are vastly lower then for example France which is well known for its love for the cheque

  • Bob Ford

    The banks have been able to process bills of exchanges, but it has been a manual process. I can see the cheque degenerating into this form of process and therefore the use and the cost thereto will become the factors.
    Personally, it must be at least 5 years ago that I issued a cheque

  • Richard Davies

    Has anybody considered the elderly? Whilst I hardly ever use cheques. My parents in law would be lost without them. Their whole way of life is supported by cheques and pass books.

  • Chris Skinner

    Hi Richard
    Sandra Quinn, a director of the Payments Council, states that they “are completely aware that elderly, disabled and disadvantaged people need alternatives to be in place.”

  • James

    I want to use cheques. I don’t care whether Belgium forced their population to abandon them or whether there was a revolution as a result.
    There are signs that the decline in the use of cheques has been levelling out for some time now, leaving a portion of the population who don’t appear set to abandon them. That is why the Payments Council are now trying to force the change through, against the will of many, but still attempting to appear that they are acting in our interest.
    If you want to use internet payments, or cash, or direct debit, or whatever, then good for you. Some of us want to continue using cheques.