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Associate Article

The death of the chequebook

It seems that the chequebook’s days are numbered. The start of August saw Sainsbury’s becoming the latest addition to a growing list of major retailers that already includes the likes of Argos, Boots, WH Smith and Currys who will no longer accept cheque payments.

Of course it hardly comes as much of a surprise, plastic has ruled for some time now – there’s been a 40 per cent decline in cheque payments since 1990. That retailers are finally beginning to bite the bullet and ban the cheque reflects a confidence that in doing so they won’t lose any business.

The crucial disadvantage of the cheque has always been that it’s basically a far less convenient, more time-consuming method of payment. In these days of credit cards and high speed, no pen needed, chip and pin transactions they have increasingly come to feel like an outmoded, almost nostalgic, throw-back to a past when commerce was less speed conscious.

There are numerous issues that have been held up as reasons for the cheque gradually being phased out; prominent amongst them is the notion that there is an increased risk of fraud compared to credit cards and other methods of payment. Certainly the potential for forgery that exists with cheques seems somewhat anachronistic given the resources recently pumped into converting to chip and pin technology. It has also been suggested that cheques aren’t eco-conscious and that we should be moving towards no-paper methods of payment.

The argument for cheques is essentially limited to the concern that an older generation of consumers still uses their chequebook to make the majority of their purchases and don’t yet feel completely confident using plastic. The fact remains, however, that a cheque guarantee card has long been required to make cheque purchases so it probably isn’t too impractical to hope that debit cards are used to make chip and pin payments instead. It’s possible that to worry whether elderly people might struggle with the transition would be to underestimate how comfortable most of them actually are with card payments these days, after all cards have now been around for a good 40 years. There were similar concerns when chip and pin was first introduced but they turned out to be largely unfounded.

Whilst the process of completely phasing them out is likely to be a slow one (predictions have suggested somewhere around 2025) account holders at numerous high street banks including Halifax and NatWest’s current accounts are now being given the option of whether they want a chequebook. So, for those still attached to the idea of cheques (they are still useful for paying trade’s people or sending in the post) the option is still there but maybe not for too much longer.

Read the British Banking Association’s guide to cheques.

There’s an interesting article on cheques on Motley Fool (‘Things to know about cheques’) where you’ll also find a useful current accounts comparison table.





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