Cheque ban being reconsidered – what’s the alternative?

I engaged fully in the conversation on this topic last Autumn, and I said everything I have to say on the subject in great detail there.

Briefly, though, I’ll repeat my main points again here:

1.) Cheques are cheaper than any type of card when it comes to the processing charges applied by the banks. For this reason millions of smaller businesses, one-man traders and charities will never be able to afford to accept cards (especially since banks penalise those who accept cards and then don’t conduct “enough” transactions per month). Unless the law forces banks to stop charging these profit-making fees, most especially the penalty charges, it will always be immoral to abolish the cheque. (Not that morals count for anything at all with the banks.)

2.) A very significant (minority) proportion of the population cannot get the banks to let them have accounts with debit cards, and since the banking crisis there is a welcome reduction in the number of people being given credit cards who cannot afford to have them. For these people the cheque is often the only alternative to carrying cash on their person. In the same way that pre-payment energy meters penalise the poorest by charging them more, removing the cheque from circulation will penalise the poorest again.

3.) As Age Concern and many others point out, a significant number of people, predominantly older people but also many with some degree of disability, find it confusing, difficult or simply unnerving to use cards. Why should the banks be allowed to discriminate agains these people?

4.) The PIN system implemented in the UK is vastly flawed. This was known by the banks before it was implemented. They persist in trying to tell us that PIN is more secure than signature. This is a lie. In Mainland Europe, and many other parts of the world the PIN system in use was vastly more expensive **for the banks** to implement and is similarly more expensive to run. That system IS more secure than signatures. Our system is the cheap option, to ensure that the banks make more profit. It is again immoral for the banks to be allowed to force more people to use cards, after they, the banks, have made the card system insecure.

5.) IN recent months we have seen the VISA and Mastercard systems under attack by what might be called “cyber terrorists”. Despite Visa’s hollow assurances that their system would not be vulnerable, just hours after they said this the system did crash. Visa is the system preferred by most banks over Mastercard, both for Credit and Debit cards. Neither system is immune from more similar attacks. The predominant system has failed once. If we force everyone to use cards the system will be under greater load all the time, and will be more vulnerable to attacks a) because the attackers know the chaos it will cause and b) because the system will need less of a “push” to make it crash. What do the banks expect us to to then? For anyone who was in a supermarket checkout queue when Visa crashed and saw the chaos, terror, confusion and plain anger, followed by the war-like scene of abandoned shopping trollies full of food, it doesn’t take that much to see that relying wholly on cards is inviting trouble (and that’s before we consider what happens in a humber power cut!).

The Treasury Select Committee’s announcement is most welcome and deserves cross party and overwhelming public support.

The bank show no remorse what ever for the way they crashed the economy and it is time they were reigned in. This could just be the first, very small, step towards making them take some responsibility for once.