Inquiry launched into plan to phase out cheques

An inquiry into plans to phase out the use of cheques was launched today by a committee of MPs.

The UK Payments Council announced in December that it planned to end the use of cheques by October 2018.

It said it would promote alternative payment methods to ensure consumers were not left "high and dry" by the withdrawal of cheques.

The Treasury Select Committee said it planned to look into the advantages and disadvantages of abolishing cheques, particularly the impact the move would have on certain groups in society.

It also wants to look at the development of alternative payment methods, as well as trends in cheque usage, including how many people are likely to still be using cheques in five and 10 years' time.

Cheques were first introduced 350 years ago, but the UK Payments Council has said their use is in "long-term, terminal decline".

The use of cheques has been falling since 1990, dropping by 40% during the past five years.

If current trends continue, cheque use would decline to 1.6 million a day by 2018, down from 3.8 million a day in 2008.

No major UK-wide supermarket chain accepts the payment method, along with most petrol stations and high street stores, due to the relatively high costs of processing them - around a pound.

But concerns have been raised about the impact the move to scrap cheques would have on smaller businesses and pensioners, where usage is higher.