Plans to scrap cheques dropped
Tuesday 12 July 2011
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Government may intervene to protect vulnerable customers if no alternative to cheques was put in place before they were withdrawn.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.
Diving in at the deep end is no excuse for shirking the style stakes
'Scrap the trap': calls for change grow as banks are told to play fair with loyal savers
Buyers beware of new-build home headaches
Bargain Hunter: Eurostar offers child fares for £1 each way to Paris, Brussels and Lille
Relaxed pensions rules: Guide to what they mean to you
10 tips for taking out a personal loan
- 2 Belgium fan Axelle Despiegelaere lands L'Oreal campaign after World Cup viral photo
- 3 Why I'm on the brink of burning my Israeli passport
- 5 Blackest is the new black: Scientists have developed a material so dark that you can't see it...
Sustained immigration has not harmed Britons' employment, say government advisers
War is war: Why I stand with Israel
Even when it brutalises one of its own teenage citizens, America is helpless against Israel
Socialist Worker called to apologise over ‘vile’ article saying Eton schoolboy Horatio Chapple's death is ‘reason to save the polar bears’
Emergency data law: David Cameron plots to bring back snoopers’ charter
NUT strike: David Cameron announces crackdown on strike action ahead of mass industrial action
iJobs Money & Business
£70000 per annum: Harrington Starr: Information Security Manager (ISO 27001, A...
£75000 - £85000 per annum + ex bens: Deerfoot IT Resources Limited: Biztalk Te...
£60000 per annum: Harrington Starr: Trade Desk Specialist (FIX, Linux, Windows...
£35000 per annum: Harrington Starr: Service Desk Analyst (Windows, Active Dire...
Day In a Page
A five-bedroom house in the picturesque village of Kettlewell, north Yorkshire
An 18th-century former coaching inn with original staircase, open fireplaces and beams throughout
A Grade II-listed Georgian town house with three bedrooms and a south-facing courtyard, near Arundel Castle
Feel on top of the world at this über chic penthouse on the 37th floor of one of Europe’s tallest blocks.
A Grade II-listed Victorian villa with six bedrooms and two further cottages, all with spectacular sea views
A grade II-listed, Georgian cottage with mature 50ft garden, perfect for summer entertaining
A magnificent Georgian pile with turrets, seven bedrooms, a heated pool and four acres of gardens
Fairoak Farm has five bedroom suites, gym, outdoor swimming pool and golf course
Chic two-bedroom river-fronted flat with a private lift that delivers you directly to your home
A spectacular seven-bedroom Tudor pile, once owned by Henry VIII, with 18 acres of land
A seven-bedroom Georgian property previously used as a picturesque wedding venue
A split-level flat in a church conversion with two en suite bedrooms and 1,200sq ft of living space
A three-bedroom bungalow situated behind an impressive stone wall, £645,000
Windsor Castle overlooks this three-bedroom Victorian cottage located on one of Windsor's smartest roads
Chapel House is a former vicarage with nine bedrooms in the beautiful Upper Wye Valley
A five-bedroom B&B and separate owner's accomodation with potential for conversion
Enjoy summer by the Thames in this two double-bedroom converted warehouse in Rotherhithe village
A one-bedroom, luxury apartment with private gym and concierge service in Moorgate
A four-bedroom house in Hermitage Gardens with three reception rooms and landscaped gardens
A seven-bedroom Grade II-listed property with a separate self-contained apartment
A five-bedroom Victorian house with three reception rooms and galleried landing, £695,000
A six-bedroom farmhouse with five acres of land in a former cloth-making village
A secluded seven-bedroom detached house with large private garden, £490,000
A three-bedroom cottage overlooking Sarratt village green with open fires and solid oak floors
A three-bedroom maisonette flat in a Grade I-listed, Georgian townhouse in a sought-after location
A one-bedroom apartment located within a private gated development, north of Turnham Green
Look forward to a brighter future at two-bedroom Sunny Cottages, ideal for Londoners looking to downsize
A three-bedroom red-brick cottage with outbuildings and pretty gardens, £200,000
This three-bedroom flat within a former textile factory spans the corner of the fourth floor and has a balcony
A charming four-bedroom Oxfordshire cottage with oak floors and chunky-beamed ceilings, £465,000
A beautiful one-bed flat in a sought-after portered block, with access to Norland Square communal gardens
A one-bedroom flat within a Sixties school conversion with high-spec design and open-plan kitchen, close to Lambeth North Tube, £435,000
A 17th century four-bedroom house, with open fireplaces, cellar and pool, £600,000
A three-bedroom, coach house with luxury open-plan living space and contemporary breakfast bar
A newly refurbished one-bedroom flat in the heart of Mayfair, close to Grosvenor Square