Trusty cheque faces the axe
They were once a banking staple but soon the trusty cheque will be a thing of the past.
SUFFOLK: They were once a banking staple but soon the trusty cheque will be a thing of the past.
The first UK cheque was written 350 years ago with the payment method reaching a peak in popularity in 1990 when 2.4 billion were issued.
But today, the cheque is facing the end with plans to scrap the system by the end of the next decade.
Small business groups in Suffolk have condemned the move, claiming that savings achieved by the big banks will be at the expense of higher costs to customers from alternative payment methods.
The UK Payments Council set 2018 as the target date for the end of the cheque clearing system - providing that adequate alternatives are in place by then.
But small firms fear that the alternative payment methods will be unattractive, both for them and many of their customers.
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Kim Brown, chair of the Ipswich and Suffolk Small Business Association (ISSBA), said: “The cheque system works very well for many small businesses as it gives them sight and control of when they are paid and make payments out.
“And how will the elderly cope? The arguments to keep cheques are clear: they are simple to use, work well, are cheap and universal.
“Electronic payments are convenient but take away control. We've all come across someone whose estimated bill payment by direct debit has resulted in a large amount of their money being held by a supplier.
“Progress is essential, but losing a system that works, when there is no replacement, spells trouble.”
The Federation of Small Businesses also wants the cheque to stay, arguing that the UK Payments Council vote was dominated by representatives from the major banks which will benefit from the ending of the system.
FSB spokesman Stephen Alambritis said: “This is driven by the big banks, who will save over �1bn by the demise of the cheque.
“The cheque is important to small businesses, to charities, to subscription-based companies, to the voluntary sector and to schools, and it does not behove the Payments Council to entice the demise of the cheque.”
Cheques are thought to cost banks about �1 each to process through the clearing system, which was only recently the subject of a shake-up with the aim of speeding up the process from four days to two.
However, the banks argue that the system will become steadily less cost-effective to run with the number of cheques written having halved in recent years due to greater use of electronic payment systems.
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