MSE News: Cheques to disappear by October 2018

Extant

Oh, the ad hominem.

I'll accept that as your graceful resignation from debate.

blueberrypie

savagej wrote: »

I have just had venitician blinds measured and fitted, I payed the deposit and final balance in my home using my credit card. The guy had a small chip and PIN machine that had a Vodafone SIM card in it to connect to the bank to authorise the transaction.

I've someone coming to fit blinds today, and I'm probably going to have to give him a cheque. I'd much rather be paying by credit-card, because then the money would sit in my savings (making 4%) until May, when my 0% interest deal ends, and I'd also be getting cashback on it.

I really don't think this is all as big a deal as people think. As has been said over and over and over, a lot will change by the deadline, and there will be alternatives in every situation.

james_joyce

Can someone quantify the estimated net cost of cheques remaining in existence, compared with their not doing so and other payment methods being used instead? People seem to be mentioning small sums in the tens of millions - but presumably we must actually be talking about billions of pounds a year? (Once all the massive market inefficiencies etc are accounted for). Otherwise it looks to me like a bit of a non-problem. How does it compare with the amount we, as taxpayers, have paid the banks over the past year or so?

And I still don't understand this idea that cheques are 'dying out' (except of course as a piece of propaganda by the Payments Council and their apparently-not-very-close associates in the banks). Surely their usage is just falling to a lower level? I don't see how it is tending to zero. Perhaps I have missed something?

I've always been very dubious about arguments which run along the lines of, 'We must do abc otherwise xyz disaster will happen'. I tend to find it roughly translates as 'we want to do abc so we need to exaggerate the benefits of abc and the costs of not doing it'.

looby-loo_2

As far as I can see it'll be a rise and rise of the cash in hand economy. I certainly can't see the odd job man carrying any sort of pin machine or even bank details on a bit of paper. He'll expect cash in hand - even more so than now

james_joyce

Of course some of the arguments against cheques could be made about cash as well, particularly the cost of transactions. The banks, and the (completely unrelated) Payments Council don't seem to be talking about abolishing cash. Why not? Perhaps they think people wouldn't accept it?

Noble_Savage

james_joyce wrote: »

How does it compare with the amount we, as taxpayers, have paid the banks over the past year or so?

We haven't simply paid them money. Although it's something everyone likes to repeat, we didn't just give the banks some money. We either lent them the money (and charged them a fairly hefty rate of interest and took good collateral) or actually bought a share in the banks.

Sorry, but this myth of 'we gave them loads of money for nothing' irritates me. Taxpayers own banks. It's not in our interests for them to be inefficient.

james_joyce

I didn't say we gave the banks loads of money for nothing, and we didn't. The money was used to protect depositors and the stability of the banking system. But it was a very significant amount of money, and I think it is reasonable to ask the banks to provide (whisper it gently) a certain degree of 'public service' in return.

Although we haven't 'simply paid them money', the simple truth is that we have paid them money, overall.

I'm looking at a BBC report which says the NAO estimated in April that the total loss to taxpayers would be between £20bn and £50bn, although the final figure is currently unknown of course.

And how much less money would each bank have now, had it not been for the massive lending (and share purchases) from the taxpayer? Would the difference be enough to pay to keep the cheque payments system available for some time? I suspect so.

John_Pierpoint

The rise of capitalism was financed by largely Jewish goldsmiths issuing receipts for gold deposited in their vaults = fractional banking and paper money.
Plus
Wealthy reliable individuals, prepared to take a punt on a venture by issuing pieces of paper with a promise to pay at a future date, this bill of exchange could be traded by the current owner signing it on the back and passing it to its new owner.

Two people, could establish a venture, without needing to marry each others daughters, by having an account where "both must sign".

A cheque is a promise to pay, that is divorced from the original transaction, you can sue on a cheque and it is up to the payer to prove that there has been some malfeasance not vice versa. I don't think a small trader has that protection, when faced by a "charge back" months later.

The writing was on the wall about twenty years ago when the banks got the law changed and stopped issuing uncrossed cheque books. (I never had any problem drawing two lines across my cheques).

A lot of business is done on a cheque for cheque basis. ie I have this piece of paper from you, perhaps post dated, perhaps not dated at all; "so I am prepared to treat your promise to pay as just about as good as cash and extend credit to you because I know you and though you are struggling a bit I trust you".

The banks are monopolising the ability to create credit and trust (and we all know what they charge!!!) All this stuff about "efficiency" is a smoke screen - let them charge the £1 per cheque they claim it costs them.
Somewhere else on this forum, there is a thread about lending money to friends and family (and not getting it back from people who could afford to repay). Had those generous spirited people taken an undated cheque off the borrower the problem would be much easier to solve. (I know; my neighbour was inconsiderate enough to die on me, but I had an undated cheque. !)

So of you want to be in a position of trust such as helping to run the local sports club or set up a venture with people you are not (yet) sure you can trust; you are being shafted by the banks who do not want your competition. The banks are aided by a government that is already spending half your money on your behalf, and is worried about a parallel system building up to avoid this 50% levy.

I challenge a banker to reply to my points.

paulwf

james_joyce wrote: »

Of course some of the arguments against cheques could be made about cash as well, particularly the cost of transactions. The banks, and the (completely unrelated) Payments Council don't seem to be talking about abolishing cash. Why not? Perhaps they think people wouldn't accept it?

Of course people wouldn't accept the abolishment of cash as there isn't a direct and more importantly convenient replacement for it. There are replacements for cheques and they are better...a couple of hours to transfer a BACS rather than waiting until you are next in town on a weekday to cash a cheque then wait a few working days to see if it will clear or not.

paulwf

mama67 wrote: »

and what about thos people who can not have debit/credit cards.

Anybody that can legally obtain a cheque book surely could get a prepaid debit card if they wished? Now a cut off point has been decided the market for cheque alternatives will have an incentive to expand making it easier for people to find alternatives to cheques.