Wednesday, 16 December 2009

Death knell sounded for cheques

I see that it's been a week since I last blogged so I have some catching up to do! So I'll get cracking. It's been announced on today's UK news that there is a plan to get rid of cheques by 2018. The 'UK Payments Council', first time I have heard of them, have set a date of 31 October 2018 by which time they aver there should be no need to use cheques. They, quite rightly, point out that use of cheques has been declining for a number of years now and for various reasons I can see the process continuing and possibly accelerating. As an example - more and more purchases are being made 'on line' and usually the transactions will be done using a debit or credit card, partly because you get much quicker gratification in receiving your goods. There are an increasing number of supermarkets and large stores too not accepting cheques and isn't hard to believe that more of them will join in.

In my own case I find that there is a decreasing need to write cheques as modern technology comes into play. Having said that there are certain circumstances where cheques are an ideal method of money transfer and it will be interesting to see what could replace them. I'm particularly thinking of small societies and charitable groups. For instance I'm programme secretary of our local history group: having agreed a fee with a speaker I will inform our treasurer. She gives me a cheque for the amount which I then pass over to the speaker at the end of the meeting. All very practical. What I had forgotten about and should have remembered is that such cheques need countersigning signatures which is the norm for such organisations. This point was raised by a Radio Devon listener and having been a cheque signatory I should have spotted that. It will be very interesting to see how this problem gets dealt with.

There is the matter of many many small businesses (the life blood of this country I say) who find cheques really convenient. Think window cleaner, chimney sweep, piano tuner as examples of tradesmen coming to your door. Should they and their customers be forced to adopt some sort of technology to enact payment? What about the millions of private sales that take place. Surely we can't expect buyers to have to find an ATM and perhaps carry a considerable amount of cash on them with all the risk that that involves.

It might be reasonable for banks to charge their private customers something for a chequebook to reflect the additional cost that cheques create. This reminds me (I'm showing my age here!) of the time when each cheque cost 2 old pence, a book of 30 having a price tag of five shillings in old money. This wasn't a case of "greedy bankers" by the way - I'm pretty sure that all this money went to the government. I can't recall which administration removed this charge, I just remember it happening many moons ago.

This story today has brought to the fore a little bit of history. It seems as if it was some 350 years ago that saw the first cheque in this country and I understand it was for the sum of £400, a sizable amount of money in the mid seventeenth century I would have thought. A bit of trivia I thought you should know!

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