MSE News: Cheques to disappear by October 2018

Extant

shayward wrote: »

Many traders don't like having to deal with debit and credit cards because the banks charge them 2.5% of the transaction value.

Pushing people from cheques to debit cards not only saves the bank that hassle of processing the cheque, but also earns them extra income.

Not necessarily - you're assuming that the natural shift is to debit or credit cards, as opposed to an (as yet) unknown quantity - see, for example, cell phone banking in Asia (helpfully evidenced by a BBC video linked in the news article above).

Although card and contactless payments will no doubt increase, it's likely the shift will go more towards cell phones - with both usage and functionality growing year by year, they present a convenient way to tackle both this issue and to allow bill payments etc. to be undertaken to businesses, perhaps initiated by text message or by an application on the phone.

Card usage becoming more and more prevalent wouldn't necessarily increase income, either. It would likely make the market for card processing even more competitive, and reduce the overall costs associated with accepting card payments.

spenderdave

Although the elderly are being quoted as being against this change, I think it stretches far wider. I am both a small trader myself and also treasurer of our local radio club and my church. Many organisations like churches and other small clubs need two signature authority on their cheques and as such we don't have debit or credit cards or payment authority for internet banking transfers. Apart from small items done by cash cheque is the only means of payment (or paying it on a member's personal credit card and getting refunded by cheque). In my business most people pay in cash (normally fairly small amounts) but I do also take cheques. For many small businesses (ie small turnover) it is just not feasible to set up facilities to accept credit/debit cards. Payment via internet banking is a possibility, but how many of you would be happy to give your bank account details to a total stranger and hope they then go away and pay you? Just a few of the things which they have obviously not considered - and presumably the decision will be made on the advantages to the mega-retailers alone, ie profit...

Extant

rb10 wrote: »

Whilst I'm all for the decline of cheques, I do wonder how they can withdraw them completely in 2018. According to the forecast of cheque usage on the BBC article, there are expected to be around 300,000,000 cheque transactions in 2017.

It'd be a seriously large jump, to go from 300,000,000 in 2017 to 0 in 2018. They really can't expect people to change their habits so suddenly.

Although it's already been mentioned above, that's the purpose of an announcement now.

It's never been expected to be a sudden stop, and the projected usage is based on current trends. What you could expect to see in the years running up to abandonment might include the discontinuation of cheques for consumers and incentives to businesses to cease/decrease cheque acceptance. It's hard to predict what actual cheque usage would be in 2017.

Extant

spenderdave wrote: »

Although the elderly are being quoted as being against this change, I think it stretches far wider. I am both a small trader myself and also treasurer of our local radio club and my church. Many organisations like churches and other small clubs need two signature authority on their cheques and as such we don't have debit or credit cards or payment authority for internet banking transfers. Apart from small items done by cash cheque is the only means of payment (or paying it on a member's personal credit card and getting refunded by cheque). In my business most people pay in cash (normally fairly small amounts) but I do also take cheques. For many small businesses (ie small turnover) it is just not feasible to set up facilities to accept credit/debit cards. Payment via internet banking is a possibility, but how many of you would be happy to give your bank account details to a total stranger and hope they then go away and pay you? Just a few of the things which they have obviously not considered - and presumably the decision will be made on the advantages to the mega-retailers alone, ie profit...

All of the above are valid concerns but are based on the payments situation of 2009, not of 2018.

The discontinuation of one facility encourages progression of another to fill the gaps. It's likely that cards will become cheaper to process or that it will be easier to initiate transfers. In turn, it will be easier to access details of receipts.

You mention giving your account details to someone to "go away and pay". This is under the assumption that the person wouldn't be able to initiate a payment from your business premises (increasingly easy through cell phones) and that you wouldn't then have some way to acknowledge payment immediately (either by a phone of your own or a computer).

Noble_Savage

spenderdave wrote: »

Payment via internet banking is a possibility, but how many of you would be happy to give your bank account details to a total stranger...

Which is exactly what you do whenever you write out a cheque. Bank account and sortcode, plus a nice copy of your signature, too.

ElkyElky

I often use cheques when sending money through the mail to friends/family.. it saves me the hassle of going to the post office to get a postal order.

It isn't always possible to send money via electronic methods.

Premier_2

According to the BBC @ 16.24 today, the demise of the cheque would only occur "if adequate alternatives are developed"
http://news.bbc.co.uk/1/hi/business/8414341.stm

The MSE article appears to imply it's a done deal.
Has there been some very recent development on this?

wsheena

i have to say i'm with the 'against' on this.
each week i send in lunch money to school and pay weekly for school clubs - all by cheque.
i'm not about to send my child to school each monday morning carrying cash, nor think it's at all fair that i would have to find the time to go into a bank at some time during the week to get cash out in set denominations for school lunches, clubs, trips etc.
where exactly is the benefit in this?

and how about when you recieve an invoice in the post?
absolutely nothing wrong with cheques at all.

funny isn't it, that when the banks are told to speed up the cheque clearing process to stop making money out of us at our expense, they ditch the whole thing!!

glider3560

wsheena wrote: »

i have to say i'm with the 'against' on this.
each week i send in lunch money to school and pay weekly for school clubs - all by cheque.
i'm not about to send my child to school each monday morning carrying cash, nor think it's at all fair that i would have to find the time to go into a bank at some time during the week to get cash out in set denominations for school lunches, clubs, trips etc.
where exactly is the benefit in this?

I was browsing my old secondary school's website a few weeks ago (just seeing whats changed recently) and noticed that you could pay for absolutely everything online, by credit or debit card. Lunch could be paid online or by weekly direct debit which was added to a student's lunch card, even school trips can all be paid online.

wsheena wrote: »

and how about when you recieve an invoice in the post?
absolutely nothing wrong with cheques at all.

The invoice will state: Sort Code: xx-xx-xx Account Number: xxxxxxxxx, Reference 12345678. You then go online or pick up the phone and make the payment. The recipient will appreciate the fact they get the money quickly and don't even need to visit the bank.

wsheena

i'd best tell my infant school to pull their finger out then hadn't i? and as for the gate company that sent me their invoice yesterday...should i be telling them i won't pay until they produce a 'new and improved' invoice?
er....no.