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UK Payment Council Confirms Closure Of Cheques By 2018

Payments processor, Rapidata Services Plc (Rapidata) is urging charities to start early preparations for the closure of cheques in little over 8 years, following The Payments Council’s announcement yesterday, (16 December 2009), that cheques will be withdrawn as a payment method by 2018.  Charities are advised to start planning now to secure alternative payment mechanisms from their supporters.  Currently, alternative payment options include:

•    Credit card / debit card
•    Direct Debit (for regular or one-off payments)
•    Internet payment / bank transfer
•    Smartcard (similar to Oyster card) swipe technology.

Scott Gray, Managing Director of Rapidata Services Plc – the leading Bacs-approved bureau for the processing of direct debits, says:

“Cheques have been around for 350 years, but their use has been in decline for many years now and it is no surprise that they will be gone in little over 8 years. While this may seem alarming to many charities who currently receive a significant number of cheque donations, a lot can happen in 8 years and the Payments Council has committed to review the decision in 2016, ensuring that suitable payment alternatives are available. Just look at where we were 8 years ago compared to where we are now.  For example, smartcards and payment by mobile phone weren’t yet on the scene.”

“Providing that charities are well prepared, this move is a positive opportunity to engage with supporters and convert them to more cost-effective means such as Direct Debit or Credit Card.  Rather than letting the banks decide whether or not to continue to accept cheques, the Payments Council has decided to actively manage the process.  This will accelerate the development of new, cost-effective payment alternatives.  But, charities need to start thinking now about the implication to their campaigns if cheques were no longer available and make preparations or they may risk losing donations.”

Rapidata is informing all clients about the change, advising them to get ready for the changeover from cheques to alternative payment mechanisms.  The Payments Council has outlined within its report the importance of supporting third sector groups, amongst other key stakeholders in preparing for this change.

Useful facts about cheques:

1659 was the date of the earliest known cheque
Cheques are not legal tender but legal documents governed by the Bills & Exchange Act 1882 and the Cheques Act 1957 and 1992.

Income Change by Payment:

1990 2008
Credit Card 0.75bn 2.05bn
Debit Card 1.22bn 8.32bn
Automated Payments 1.74bn 6.01bn
Cheques 3.98bn 1.4bn

Source: Cheque & Credit Clearing Company

For further information or to arrange an interview with Scott Gray, contact:
Lucinda Frostick, TurnerPR 07712 045 308, lucinda@turnerpr.co.uk

Posted by Scott Gray on 17/12/2009 within Direct Debit, Fundraising
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