Plans to scrap cheques dropped

Plans to scrap the use of cheques from 2018 were dropped today after the UK Payments Council admitted there was no better paper alternative.







The body, which is made up of the major banks, said cheques will continue for as long as people need them and the target for possible closure of the cheque clearing system in 2018 has been cancelled.



The Council announced in 2009 that cheques would no longer be used by October 2018, as long as viable alternatives had been developed.



Work started last year on an alternative paper-based system, but today the Council said it has now decided that this is no longer the best option and "retaining the cheque is a better approach".



The decision to scrap cheques was met with a wave of criticism from small businesses, charities and pensioner lobby groups, who accused the banks of ignoring the needs of millions of vulnerable people.



Michelle Mitchell, charity director at Age UK, said: "We are delighted that the Payments Council has listened to the many people who said how difficult the loss of cheques would be for them. This is a vital first step that will help many older people."









Last month, Richard North, the head of the Payments Council, told the Treasury Select Committee: "There is no question of there being a closure of the cheque clearing system without there being alternatives in place which are widely in use."



Mr North said one of the alternatives to cheques was likely to be mobile phone payments, under which people could transfer money to another person just by knowing their mobile number.



He added that the other alternative would be paper-based and look and feel like a cheque, but would be processed more quickly and efficiently. This option was scrapped today.



Cheque usage has declined by 70% since 1990 and by 42% in the past five years, according to the Council, with usage expected to decline by a further 40% during the coming five years.



In a recent letter to Andrew Tyrie, the head of the Treasury Select Committee, Financial Secretary to the Treasury Mark Hoban said 1.1 billion cheques were issued in 2010 and this was a "significant volume" even if the use of cheques was in decline.



Mr Hoban said that the Government may intervene to protect vulnerable customers if no alternative to cheques was put in place before they were withdrawn.



In a statement today, taxpayer-owned bank Royal Bank of Scotland said: "This is a welcome move. RBS has been clear for some time that we don't support a fixed deadline and will continue to offer cheques as long as our customers need them."









Speaking after the decision today, Mr Hoban said: "I am glad that the Payments Council have listened to what we and others have said about the future of the cheque.



"This is a victory for those who continue to rely on this trusted form of payment - including charities, the elderly and small businesses.



"It would have been irresponsible for banks to abolish the cheque before a credible and coherent alternative had been developed."



Sarah Brooks, director of financial services at Consumer Focus, called for retailers who have stopped using cheques to reassess their decision, suggesting that with the withdrawal of guarantee cards last month it could otherwise mean an unmanaged decline in the use of cheques.



"The 2018 deadline may have gone but if the future of cheques is still uncertain, it is vital that the Payments Council continues to investigate alternatives that work for all consumers.



"Many retailers should now reconsider their decision to stop accepting cheques in the absence of workable alternatives for customers," she said.

PROMOTED VIDEO
Arts and Entertainment
Sheeran arrives at the 56th annual Grammy Awards earlier this year
musicYes, that would be Ed Sheeran, according to the BBC
Arts and Entertainment
AKB48 perform during one of their daily concerts at Tokyo’s Akihabara theatre
musicJapan's AKB48 are one of the world’s most-successful pop acts
News
Ian Thorpe has thanked his supporters after the athlete said in an interview that he is gay
people
News
The headstone of jazz great Miles Davis at Woodlawn Cemetery in New York
news
Arts and Entertainment
Brendan O'Carroll has brought out his female alter-ego Agnes Brown for Mrs Brown's Boys D'Movie
filmComedy holds its place at top of the UK box office
News
newsBear sweltering in zoo that reaches temperatures of 40 degrees
Arts and Entertainment
Professor Kathy Willis will showcase plants from the Royal Botanic Gardens at Kew
radioPlants: From Roots to Riches has been two years in the making
Arts and Entertainment
TV The follow-up documentary that has got locals worried
Arts and Entertainment
Eminem's daughter Hailie has graduated from high school
music
Arts and Entertainment
Original Netflix series such as Orange Is The New Black are to benefit from a 'substantial' increase in investment
TVHoax announcement had caused outrage
Life and Style
Swimsuit, £245, by Agent Provocateur
fashion

Diving in at the deep end is no excuse for shirking the style stakes

News
One Direction star Harry Styles who says he has no plans to follow his pal Cara Delevingne down the catwalk.
peopleManagement confirms rumours singer is going it alone are false
Finacial products from our partners
Property search
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

ES Rentals

    iJobs Job Widget
    iJobs Money & Business

    Information Security Manager (ISO 27001, Accreditation, ITIL)

    £70000 per annum: Harrington Starr: Information Security Manager (ISO 27001, A...

    Biztalk - outstanding opportunity

    £75000 - £85000 per annum + ex bens: Deerfoot IT Resources Limited: Biztalk Te...

    Trade Desk Specialist (FIX, Linux, Windows, Network Security)

    £60000 per annum: Harrington Starr: Trade Desk Specialist (FIX, Linux, Windows...

    Service Desk Analyst (Windows, Active Directory, ITIL, Reuter)

    £35000 per annum: Harrington Starr: Service Desk Analyst (Windows, Active Dire...

    Day In a Page

    Super Mario crushes the Messi dream as Germany win the 2014 World Cup in Brazil

    Super Mario crushes the Messi dream

    Germany win the 2014 World Cup in Brazil
    Saharan remains may be evidence of the first race war, 13,000 years ago

    The first race war, 13,000 years ago?

    Saharan remains may be evidence of oldest large-scale armed conflict
    Scientists find early warning system for Alzheimer’s

    Scientists find early warning system for Alzheimer’s

    Researchers hope eye tests can spot ‘biomarkers’ of the disease
    Sex, controversy and schoolgirl schtick

    Meet Japan's AKB48

    Pop, sex and schoolgirl schtick make for controversial success
    Iraq crisis: How Saudi Arabia helped Isis take over the north of the country

    How Saudi Arabia helped Isis take over northern Iraq

    A speech by an ex-MI6 boss hints at a plan going back over a decade. In some areas, being Shia is akin to being a Jew in Nazi Germany, says Patrick Cockburn
    The evolution of Andy Serkis: First Gollum, then King Kong - now the actor is swinging through the trees in Dawn of the Planet of the Apes

    The evolution of Andy Serkis

    First Gollum, then King Kong - now the actor is swinging through the trees in Dawn of the Planet of the Apes
    You thought 'Benefits Street' was controversial: Follow-up documentary 'Immigrant Street' has got locals worried

    You thought 'Benefits Street' was controversial...

    Follow-up documentary 'Immigrant Street' has got locals worried
    Refugee children from Central America let down by Washington's high ideals

    Refugee children let down by Washington's high ideals

    Democrats and Republicans refuse to set aside their differences to cope with the influx of desperate Central Americas, says Rupert Cornwell
    Children's books are too white, says Laureate

    Children's books are too white, says Laureate

    Malorie Blackman appeals for a better ethnic mix of authors and characters and the illustrator Quentin Blake comes to the rescue
    Blackest is the new black: Scientists have developed a material so dark that you can't see it...

    Blackest is the new black

    Scientists have developed a material so dark that you can't see it...
    Matthew Barzun: America's diplomatic dude

    Matthew Barzun: America's diplomatic dude

    The US Ambassador to London holds 'jeans and beer' gigs at his official residence – it's all part of the job, he tells Chris Green
    Meet the Quantified Selfers: From heart rates to happiness, there is little this fast-growing, self-tracking community won't monitor

    Meet the 'Quantified Selfers'

    From heart rates to happiness, there is little this fast-growing, self-tracking community won't monitor
    Madani Younis: Five-star reviews are just the opening act for British theatre's first non-white artistic director

    Five-star reviews are just the opening act for British theatre's first non-white artistic director

    Madani Younis wants the neighbourhood to follow his work as closely as his audiences do
    Mrs Brown and her boys: are they having a laugh?

    Mrs Brown and her boys: are they having a laugh?

    When it comes to national stereotyping, the Irish – among others – know it can pay to play up to outsiders' expectations, says DJ Taylor