/ Money

Do you want to save the cheque?

Writing a cheque

It’s official – cheques are going out of fashion and plans are in place to wipe them out completely by 2018. However, one MP is arguing that the elderly still depend on them, so do they still have their place in society?

When was the last time you wrote a cheque? In a shop; to pay a bill; or maybe to pay a tradesman or friend?

For me, it’s most definitely the latter. I can’t remember the last time I took my chequebook shopping (I can already hear the disapproving tuts as I hold up the queue) and I pay all my bills by direct debit. But when it comes to repaying friends or tradesmen, the chequebook still has its place.

This is an argument one of our readers, Malcolm Murray, wrote to us about. ‘If a plumber does a job for you they expect to be paid on completion, but don’t have any facility to deal with payment by card,’ he told us. ‘So unless we keep large sums of money available, a cheque is the only practical method of payment.’

How cheques went out of fashion

The plan is for the Cheque Guarantee Scheme to be phased out completely by mid 2011 and for cheques to be made obsolete by November 2018. The Payments Council, which monitors payments in the UK, says these decisions follow wide consultation and research that shows ‘cheque use is in long-term, terminal decline’.

Strong words, and the Payments Council’s figures do back this up. There were just over 3.5m cheques issued each day in 2009, compared to 11m in the peak year, 1990. I don’t think 3.5m is a figure to be sniffed at, but it is put into perspective when compared to the 30.2m transactions made on UK cards every day in 2009.

The fight to keep cheques alive

But while there’s no denying that chequebooks have been usurped in the popularity stakes, there are still people who rely on them, not least the elderly. This is an argument that’s been getting some press of late, thanks to support from MP David Ward.

He’s been arguing that the 2018 cut-off date is wrong and would be detrimental to older people. He’s not wrong – those under 25 receive on average only two cheques a year, while over-65s get four. And as many elderly people have no access (or understanding) of the internet, cheques can be a safe and easy way for them to pay bills.

But it’s not just the elderly who will miss their paper friend – many of you raised concerns about a cheque-free world when we ran a Conversation back in July. “If the threatened death of the cheque book comes about, how are we expected to pay for things? Wodges of cash? That’s asking to be mugged,” fumed Ann Hay.

Others, like i_steven, were more concerned about how banks will benefit. “The banks will get their own greedy way again and again once they have forced us to pay larger amounts by card,” he said.

For now, the 2018 date remains in place, although the Payments Council has responded to David Ward, saying they’ll only go ahead with the date ‘if we’ve been able to ensure that alternatives have been identified, are accessible and are actually being used’. Is that good enough for you, or do you have concerns about a life free of chequebooks?

Should we get rid of cheques?

No, I still find them useful (92%, 1,229 Votes)

Yes, they're not relevant any more (8%, 109 Votes)

Total Voters: 1,338

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Dragon lady says:
3 December 2010

I’m an ‘Oldie’ but use debit and credit cards. My main objection to the ‘death’ of cheques is that I have in my family: 21 birthdays, 3 Christmas and 3 anniversary occasions on which I need cheques. All my family live away and I really cannot see any of them giving me their bank account details so that I could use me debit card to send cash presents. Investigate and you will find that the only section of the community who really want to scrap cheques are the banks.

Dear Sir/Madam,
Cheque are necessary for those of us who don’t have a credit/debit card and need to send money by post.
Rob Hodgson.

Jean Taylor says:
3 December 2010

I am a silver surfer and pay lots of bills by a direct debit card. However I still use a lot of cheques to send xmas and birthday cards to grandchildren ( last time I sent money in the post it never got there ) To pay workmen. To pay the milkman as he comes at 5.00am and I never see him.To pay for oil deliveries.etc….
I live in a fairly remote village in Cumbria with no post office and only 2 buses a week! As I have not been out for 2 weeks with the bad weather I have used more cheques to pay people lately. What alternative have the MPs in mind if anything! I am registered with Which and use your magazines and web site frequently. My son and daughter have both bought a new tv on my recommendation from Which and are very pleased with their purchase. Jean Taylor.

I am the treasurer in a charitable group and the cheque is used for payement, as all transactions need to be countersigned by a second person. The banks have offered no other facility wherby the probity of transactions can be assured in this way.
I also use the cheque to pay some tradesmen, and for sending money as presents. Although most payements are made by other means such as debit card and direct debits, I still feel the cheque remains a very useful means of payement, and an essential one until an alternative that covers all eventualities is provided.

I quite agree with keeping cheques, especially since Senior Citizens like my mother cannot cope with computers or online banking at all.
I, too, work for a local Charity aimed at the over 50s (and over 60s,over 70s over 80s!) Some members would find it easier to pay by card, but that will cost our organisation dearly in charges and training of operatives, let alone the extra time required to process payments. A lot of online retailers charge extra fees for paying by card, but not for cheques. Who really benefits from scrapping cheques? Only the banks themselves!

M. Moar says:
4 December 2010

My husband is a self-employed electrician and his customers pay by cheque. How much more complicated and costly do the banks want to make it for small businesses like his? Is the only other option for some going to be to pay by cash? I also still use my cheque book to pay for things and believe I should have this option. This is too reminiscent of the debacle surrounding pension books and the government and banks not listening to the ordinary person. The ‘one fix’ does not necessarily suit all.

I still strongly support to keep cheque. I still write cheques for payments and drawing cash from bank’s counter. I don’t trust ATM machine to withdraw cash as you can see so many people have problem with ATM. I make my payment for services by cheque and that’s way I keep records and I can see what’s going on my account. My auntie who is senior citizen has a problem using debit card or withdraw cash. All her bill payments via cheque. We must keep cheque.

Marina Peel says:
5 December 2010

I do on-line banking and use my Debit Card for everyday purchases but like to use cheques to pay my various organisation membership fees, outings etc. – no queries then at a later date, from treasurers, as to whether I had paid or not – which can happen with cash payments..!!! Also, when would the poor milkman be paid ???? A money card I sent to one of the grandchildren never arrived – it would have been less costly to me to have rewritten a crossed cheque had it gone missing..

I agree we should keep the cheque. I use debit and credit cards a lot but always send cheques to my great nieces and nephews for birthdays and Christmas. Today I paid for a chiropody appointment by cheque and also pay for hairdressing, chiropractic and other services by cheque. As a member of the W.I. and Inner Wheel organisations I always pay for my subscription and outings by cheque. As a former treasurer I much preferred to receive payments by cheque instead of cash as it made it easier to balance the books.

I am dealing with Age Concern clients

Everyone uses cheques, everyone!

How are these people going to manage if they are removed to maximise profits for greedy banks who don’t want to handle them?

Translated: can’t be ‘bottomed’ to provide a service.

One-time banker says:
7 January 2011

Which? should campaign strongly for the retention of cheques. Apart from making gifts to family etc., there are many hundreds of small clubs who rely on cheques from members for payment of subscriptions, for payment for outings or other activities. Charities will suffer heavily if cheques are withdrawn for not everyone has – or will have by 2018 – access to computers and on-line banking and payments of donations by cheque are of appeal to many people.

secretary says:
8 January 2011

As Secretary of a Pensioners Association, where neither our Treasurer nor a large number of the pensioners who take part in the events we run have access to internet banking, we would find it impossible to run the events which we do where we need payment in advance so that there is a commitment to attending. We could not justify a credit card machine for the volume of transactions and many elderly pensioners do not have credit cards anyway.

Cheques are also important for paying bills through the post and for paying tradesmen rather than having to take out large amounts of cash and risk muggings for elderly people.


Nick Clarke says:
19 January 2011

Regarding the need for double authentication (equivalent to two signatures) there ARE solutions already adopted by some banks and some accounts. The techology would involve internet banking, cards and the authentication devices/card readers increasingly being used in support of internet banking. One practical issue is then one of visibility of the supporting invoices for the second (or subsequent) authoriser. It needs all the banks to start supporting this, and for the charges to be reasonable, and no greater than the costs for cheques. (second post follows)

Nick Clarke says:
19 January 2011

(Second thread) The increasing numbers of stories of fraud make people reluctant to give out sort code/account number. True they are visible on the cheque, but this isn’t “a piece of scrap” that is likely to be more carelessly handled. My idea is to ‘alias’ the account number – as is increasingly used on debit cards’ – such that the alias number it is only valid for CREDITS and not available for debits. Of course this would require developments by the banks.

Nick Clarke says:
19 January 2011

(Third thread) One of the issues with electronic transfers is the very limited amount of information that can be send with the payment, and be available to the recipient – 18 characters. Who it is from will not be enough – some form of additional recipient reference will be essential (eg account ref or invoice no, class number, trip reference etc etc). The extended details need to be available via electronic banking and on printed statements. Even with this there will be a propoortion of transactions that have to be queried because of unrecognised credits and missing receipts. The banks systems will need to be able to handle this and track the transactions.

Mike Walsh says:
29 March 2011

Two more problems when cheques are not used.

1. I have just ( 6 days ago) recieved an unexpected credit on my personal current account. The description of it is utterly meaningless to me.
I asked my bank if they knew what it was. They said (3 days later) that they had very little information, except that it had come from a Nat West Bank. They gave me a Nat West phone number claiming that I could try asking them. I called, BT intercepted… “this number is no longer in use.”, no alternative was offered.
Back to my bank they reluctantly gave me the sort code of the Nat West bank, so tomorrow I’ll have another go at getting to the bottom of it.
It is hard to believe that I would ever be handed a cheque, or get one by post, and have No idea at all where it had come from.

2. I used Online Banking to send my Son some money for his birthday. I entered his sort code and account number, and for reference (it would not permit a blank!) I just typed “Happy Birthday from Dad”.
Three months later I agreed to lend him Β£250, for 6 weeks. I transferred it to him using online banking. Once I entered the account number and sort code it provided from its memory the reference “Happy Birthday from Dad”. It did not allow me to change the text to anything else!
Ah well I’ll just have to phone him and be clear that this is NOT a gift.
Now ,Roll forward a few months and its almost Christmas, Guess what……. “Happy Birthday from Dad”.

Nick Clarke says:
19 January 2011

(Fourth thread) Another of the risks with electronic transfers arises if the money ends up in an unintended bank account. An invalid number should be spotted, but I don’t believe there is any routine validation that the account really is owned by the recipient. Since there is currently no general right to remove the funds – it relies on the recipient being honest – individuals are at risk of beingout of pocket. This area needs careful thought by the banks before cheques are removed.

Robert Allen says:
20 January 2011

I agree it has happened to a member of our family who lost a considerabe amount of money as despite the correct entry of the intended recipient code the money went to the wrong account and the bank concerned says ”There is nothing they can do”!

Nick Clarke says:
19 January 2011

(Fifth thread) I believe that use of cash is in decline: cash transport costs a lot with the necessary security. Removal of cheques is likely to INCREASE the use of cash with security implications for us all. A return to hoards of money under the bed?

Hello Nick, Great to see you really getting into this debate about cheques and approaching so many different arguments. However, please try not to post repeated comments in a row, it’s best if you can put all your thoughts into one comment, unless you want to reply individually to others in the thread. Thanks!

Robert Allen says:
20 January 2011

Cheques should NOT be phased out. Whilst payments can often be made on line there are many payments where a cheque is the only way, an example I could not leave cash for our Milkman he calls around 5.00am but a cheque solves all the problems. Not every retailer has a card machine to take payments. What is the problen with keeping cheques? Even if the usage has dropped they are still escential to many especially the less able to get obout such as the elderly.

Iain Dennison says:
22 January 2011

I write about 20 cheques a month. It is vital as a small business account to both receive and issue cheques so that a clear check can be made and accounts kept. It would be impossible to afford the electronic machinery needed to process cards. Also BACS causes far more work because payments have to be checked every month. This system was used when I lived elsewhere and virtually every month there was at least one or two errors in the amount companies paid. Sometimes there were payments missed off altogether and this caused considerable hassle for a voluntary organisation.