Payments Council to keep cheques and cancels 2018 target
The Payments Council announced on 12th July 2011 that cheques will continue for as long as customers need them and the target for possible closure of the cheque clearing in 2018 has been cancelled. The Payments Council Board will continue to focus on security, efficiency and encouraging innovation in all types of payments to ensure customers have options best suited to the 21st century.
Richard North, the Chairman of the Payments Council said:
“It’s in the DNA of the Payments Council to consult and listen to all those people who actually make payments and use cheques. Listening to over 600 stakeholder groups, working with the banks and following our appearance before the Treasury Select Committee, we have concluded we should reassure customers that the cheque is staying.
“Over the last two years we have learnt a great deal about what is important to our many stakeholders and we are really grateful to all of those groups and individuals who took the time to talk to us and help us reach this decision. We will use what we’ve learnt to keep improving existing systems, as well as introducing innovation, so that customers benefit from 21st century ways to pay. Innovation must be at the heart of what we do.”
Scott Gray, Managing Director of Rapidata comments:
“While on the surface, this seems to be pretty good news for the sector, I would argue that this is not news that organisations should be celebrating. We know that cheques are a costly mechanism that banks aren’t keen on and there is nothing to stop them accepting cheque payments tomorrow.
But, by establishing a timeframe (2018) for the end of cheques and for sourcing a viable paper alternative, the Payments Council had issued a spur to banks for hanging on to the mechanism until that date, as well as committing to sourcing the necessary alternative payment vehicle. The proposed timeframe gave us all a clear goal. We knew what was happening when and had time to research supporters’ views. It also fuelled debate about cheque usage and costs across all sectors.
As cheque usage continues to decline, the cost to organisations will grow and eventually become uneconomical. We’re likely to see a natural phasing out of cheques in the years to come, but this may happen now before an alternative is ready. The end of cheques is inevitable. We cannot afford to ignore this issue in light of the Payment Council’s announcement to drop the abolition date. The challenge now is to ensure that organisations continue to debate and research into the move away from cheques and the most feasible ways for supporters to donate.“