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.

Why are the banks looking for an alternative to cheques? If it ain’t broke, don’t fix it! On Money Box on BBC Radio 4 yesterday I heard (thankfully) that the committee looking into this accepts that some form of paper payment method is needed for many people – birthday gifts for children, charity donations, paying the plumber or milkman. The alternative had a complicated name but sounded exactly like a cheque. What a pointless waste of time. The only sensible improvement would be for the bank receiving the cheque to process it electronically to save time (and cost).

Use of cheques is not (and never has been) an issue for the elderly alone. I use online methods, telephone banking, branches and cheques for different purposes. Why should I not be able to pass someone a piece of paper instructing my bank to pay them when this is the most convenient method? It’s my money, and the banks make enough investing it when I am in credit (and charging me for any overdraft).

And for those who haven’t used one for a while, how much of this is because many high street stores now refuse to accept them? The stores are forcing our hands to speed up their queues. Asking how many people would prefer to use cheques if they could might give a more realistic view of the amount of need for cheques.

As someone who runs a small business, we rely heavily on cheques AND ON THE GUARANTEE that will cease at the end of June. We cannot justify the cost of a card processing machine. This may put us out of business.

This must be reviewed properly before any decision is taken. Many tradesmen (plumbers, window cleaners, gardeners etc) are paid almost entirely by cheque, and for such as these card payment is simply uneconomic, even if customers were happy to oblige. Any how many of us hold enough cash in the house to pay a bill of £50 -£100? I have heard mention of some type of voucher – but surely that is exactly what a cheque is?

I write a cheque weekly for private consultations.
My disabled friend pays me for her shopping by cheque. Otherwise she would have to 1 pay extra for delevery or 2 keep money in her home overnigh as due to work pressure I connot always keep to our arrangements.
My hairdesser is a small business who cannot afford to have a debit machine.
My postal service is dishonest so birthday/ christmas gifts are all by cheque. Gift cards frequently went missing so choice was send by recorded delevery more expense.

Keep the cheques.

Many small clubs and associations run their bank account with a 2 signature requirement. How will this be catered for with electronic payment?

I agree with the customer who says if it aint fixed don’t change it. As an OAP I find my cheque book really useful and use it at least once a week to pay tradespeople, order goods etc.
It costs more to pay by card, and benefits the banks not the customer. Banks should serve the customer and follow their wishes, not impose their choices on customers.

I manage my mother’s money jointly with my sister as my mother ticked the joint power of attormey box, rather than ‘jointly and severally’. This means we are unable to have a debit card or use internet banking and our only means of paying for things for my mother (like all the care she needs) is via a cheque signed by both of us. I have no idea what we would do if cheques were abolished.

I use cheques to pay small businesses, charity subscriptions, presents for my many great nieces and nephews and this afternoon needed to write out a cheque for a service provided by my G.P. How are clubs and charities going to cope with the demise of the cheque? Previously having been a treasurer of an association it would have been impossible to run the accounts without a cheque book facility. The idea is crazy.

Why not just leave things alone? I wrote a cheque yesterday, the first for nearly a year, but it was, without doubt, the BEST method for the purchase I was making.

Cheques have pretty-much phased themselves out, but why kill them altogether? I haven’t seen any compelling arguments that they should go. At the very least, allow individual banks to decide for themselves whether they’ll ‘use’ cheques. The savvy banks (and building societies) will keep what best suits their customers.

I have just been accepted to go on a driver awareness course at £80 run by TTC2000 for speeding (35mph on a 30mph road). The only way to not incurr a charge is to pay by cheque, debit and credit cards are charged at £1.00. Why should I have to pay any additional amount?
Until this situation where the only method to pay for free is a cheque then they should remain.

As a minor bean-counter on my amateur club’s finance committee I can say that cash payments are a pain to keep track of, inconvenient for distant members and have an associated risk of theft. So far we have not been able to see how a credit or debit card system could work for us without permanent staff being available, quite apart from the cost incurred due to low throughput and the difficulty of relating payments to the event or the service provided. Cheques by contrast provide a paper trail that is easily checked by club and member. Each year there are problems needing this form of resolution.

I think the banks are nothing short of bullies and want to elliminate cheques for their convenience.
I see no real reason for cheques to be abolished.

I agree with so much of what has been said above against the discontinuation of cheques.
We use cheques each year to give presents to our children, young relatives and some charities and to pay some bills.
They are convenient and I am not sure what the alternatives would be. Certainly I don’t wish to go to the trouble of determining each year the account details of everyone for a direct bank transfer.
As someone said above “if it ain’t broke – don’t fix it”.

The first bank to announce that it guarantees to keep cheques and not phase them out will do 2 things…firstly it will get a lot of business from people transferring their accounts to that bank, secondly it will put a marker down for the other banks that they will need to stay in the system to keep market share. And if the other banks don’t follow all those wanting to use cheques will all maintain an account with the “cheque bank”

I am Secretary to a Retired Employees Association and organise various visits and events. These are paid for by cheque. I cannot think of any method of payment which would not involve giving out details of the Association’s bank account details. This is not a good idea from the security point of view.

I also belong to various small clubs whose annual membership is paid by cheque. These are gradually changing to Standing Orders but these can cause problems when the payment goes up.

I also pay for quite a few visits by cheque and some small charities do not take donations by credit card.

So if there is an alternative, and there must be because other countries have done away with cheques, it had better be a good one.

It sems that I have written nineteen cheques this year and for most of them there would have been no practical alternative. I also deduce from this exercise that as well as making an important contribution to my personal social life and well-being through access to the things I can only get this way, the cheque is a vital facility for numerous small traders and voluntary organisations many of which would struggle to survive without a convenient means of receiving payments. Shutting off this lifeline is not very Big Society, as someone has already mentioned. A further point not yet mentioned is that many people in remote areas cannot participate in the BACS system to pay accounts because they are too far from a bank and cannot do it on-line.
According to the foreword to this Conversation thread, the banking industry says fewer than one million cheques a month are being handled. I am very suspicious of this figure. Until recently I worked for a local authority which was issuing thousands of cheques and receiving considerably more. I know they have moved more payments onto the BACS system but they are still grateful for all the cheques they receive for evening classes, home helps, council tax, parking penalties, planning applications, and so on; in fact “one-off” payments are virtually impossible any other way except by using notes and coins at a payment counter.

I am not in agreement of getting rid of cheques.

I hope this campign suceeds in keeping cheques. They work extremely well for so many purposes. Charities in particular would be very badly affected if they were abolished. I can’t see the sense in paying good money to develop a replacement – why not just keep the system which works? The key thing for me is that people have a choice – use a card if you can or want to and allow the rest of us to use cheques as we wish!

I have been using internet banking for years but for one-off payments cheques are more convenient. If, for example, I make a donation to charity I can annotate the stub with details of the recipient, the kind of payment (whether raffle or donation) and whether it was gift-aided. When I pay for orders from a catalogue, I list the items ordered on the stub.To make these notes on a computer would require a second entry in a separate document.