The imminent demise of the great British cheque is in the news again.
Last week, Richard North, chairman of the UK Payments Council – the organisation that sets the strategy for UK payments, including cheque replacement – told a Treasury Select Committee Inquiry that cheques are safe until at least 2018.
This follows an intervention by Brian Hartzer, retail director of Royal Bank of Scotland (84 per cent of which, of course, belongs to the taxpayer). He declared that the bank is not going to get rid of cheques “unless there is a viable alternative and unless customers are ready for it”.
The reaction to these announcements was triumphant. Which? magazine called it a ‘reprieve’. The Daily Mail said cheques had been saved and the Mirror went further and declared a U-turn.
It all sounds rather momentous until you cheque – sorry, check – the UK Payments Council’s website and see that this has been exactly their policy since December 2009, when it set a target date of 31 October 2018 for closing the central cheque clearing system, with a final decision to be taken in 2016.
“That’s right,” says a spokeswoman for the council. “There has been no change at all in our policy.”
Nevertheless, the prospect of cheques being chopped has caused a very British furore. Last week Andrew Tyrie, chair of the Treasury Select Committee – where the inquiry has been rumbling along for over a year – called the council’s plan a “mess” and a “scandal”, and accused it of a “colossal error of judgement”. Committee member David Ruffley said: “This has scared the pants off Middle England.”
It is true that the prospect of being unable to use cheques to make payments has caused genuine distress for many people, especially the elderly, small businesses and charities. And while the Payments Council points out that the use of cheques has declined by 40 per cent in the past five years, dropping from a peak of 11 million a day to 3.1 million last year, it agrees they still have their uses.
“There are loads of people and organisations out there still relying on cheques to make payments, which is why we are being very, very careful in our approach,” says the spokeswoman.
So, while it talks of encouraging people to use alternative payment methods, such as debit cards and phone banking, the council says: “If required, we will ensure a viable paper alternative is in place to meet the needs of the most vulnerable members of our society.”
Before the final decision on the survival of cheques is made in 2016, however, the council is keen to hear the views of consumers and organisations that might be affected. You can find out how to get involved, and make your views heard, at: http://www.paymentscouncil.org.uk/
Future methods of payment
Uswitch.com says these are possible in years to come:
The contactless card, as seen in those big-production Barclaycard ads, will become more common, allowing us to make small payments by simply holding the card next to a card reader.
Mobile phone payments, which use your phone number as a proxy for your account, will let you make contactless payments by swiping your handset.
Fingerprint payments, where your fingerprint is linked to your account, will allow you to make a payments by simply touching a scanner. It sounds like science fiction but it is already being tried out in some schools, where pupils can use their fingerprints to pay for their school dinners.