Hold fire before you fight to keep cheques
Concerns have been voiced across the sector about the planned abolition of cheques in 2018, but little has been said about the alternatives that will be developed and the benefits of offering a suite of payment options to donors. Charities do need to make their views heard but, before jumping off the deep end, we need to take a closer look at the Payment Council’s proposals and our own gut reactions.
US businessman, Robert C. Gallagher, famously said: ‘Change is inevitable – except from a vending machine.’ And yet, charities – who are widely known for their innovation and creativity – are often steadfastly resistant to it.
At the turn of the millennium and over the next few years my job was primarily to highlight to charities the benefits of moving over from Standing Order to Direct Debit (DD). There was a real opposition at first but, within a few years, DD had become widely recognised as the preferred method of regular giving in the UK.
So, I’m not at all surprised to see similar resistance towards the plans to phase out cheques by 2018. In fact, speaking as a business that receives its fair share of payments in this way, I echo some of those concerns. But, a lot can change in eight years.
Just think… eight years ago, the Euro became legal tender for the first time. Francs were phased out. And, do you even remember the Peseta? Smartcards (such as the Oyster card) certainly wasn’t on the scene and yet they are now used by millions within the UK on a daily basis.
Cheques have been around for 350 years. But the payment industry has moved on, accelerated by the decline in cheque use, seeking a range of cost-effective payment mechanisms. This doesn’t mean to say that people will not be able to write – with good old fashioned pen and paper – a payment authorisation. The paper-based solution will need to interact with an existing payment process (such as Bacs) to facilitate cost-effective payment delivery.
Rather than letting the banks decide whether or not to accept cheques on a case-by-case basis, the Payments Council has decided to actively manage the process by imposing a realistic and viable timeline to phase out the use of cheques. When the Payments Council next meets, its focus will be on developing simple-to-use, secure alternatives for the cheque-users of today, that won’t be costly for banks, charities or businesses to process. It is in the banks’ interests, as much as ours, that they get this right. No organisation can afford to lose donations and this timeline prevents cheques from being ditched before suitable alternatives are in place.
It is, of course, important to engage with the Payment Council, to share your views and stay informed of the latest developments. Only by doing so, can you ensure you are up to speed with the full array of payment options available to your charity and can offer them in turn to your supporters.
First Published in Civil Society on 27th January, 2010.