Friday, May 06, 2011

Phasing out cheques

The abolition of cheques popped up again in the news recently due to the forthcoming deadline of scrapping the guarantee scheme in June this year.

Several arguments have been issued as to why the scrapping of cheques is a good idea:

They're expensive
Time consuming
Usage has fallen.

Okay expensive. As a business our bank charges us 28p for every cheque we receive and 76p for every cheque we write. However to make a one-off bank-to-bank payment the sort of thing we'd use cheques for we'd be charged £5.17. So cheques from our point of view are cheaper.

Time-consuming. Only from the banks point of view.

Fallen Usage. This puts me in mind of the Beeching Axe, cutting off the local rail lines and keeping the profitable (or at least the most heavily trafficked ones). The people who use cheques do so for a reason and it is highly prevalent amongst the small to medium businesses.

If it's removed something needs to replace it; but what? We need something that doesn't require messing about with computers or automated telephone systems. Something we can just write out for one off items without having to keep cash on us something like um cheques?

And there's the problem. As it stands the format of cheques is pretty much the ideal choice for one-off payments without cash or the need to carry around card-reading equipment.

2 comments:

Neil said...

They wont be phased out. our bank confirmed there are no plans to. I think this is just anti cheque media hype to reduce the use. they told us that small businesses will be be able to still use them and people get them. £50-£100 guarantee cards will go [no use anyway as those that need to use chqs are often for lots more], no automated new books, books reduced to 25 then 10 etc, so only used occasionally and as you say, when essential.

FlipC said...

Well that's good to hear. As I said it's just something that appeared as it seems to do every so often. Bloody stupid idea.