MSE News: Cheques to disappear by October 2018

Extant

John_Pierpoint wrote: »

You can still go down the pub and get mine host to cash a cheque!

How many landlords would do this now, do you think? Regardless, the cessation of cheque clearing will not magically stop your landlord from lending you some cash if so desired.

All this high tech stuff needs electricity and an army of bank staff to work. When the Irish bank staff went on strike (about 40 years ago) they were eventually forced back to work because everyone could simply carry on using the 350 year old bill of exchange system - mind you several of those cheques eventually bounced leaving someone somewhere up the chain to carry the can.

A cheque is legally defined as a bill of exchange drawn on a banker. Remove the banker and it's essentially useless.

Even in the even of a strike, a cheque still means little - there's nobody there to operate clearing. Nobody there to post the entries to an account. You can't just take your cheque back to the person and demand they pay it themselves - as it's drawn on a bank.

Nobody can turn off my cheque book and ballpoint pen; but they can turn off my plastic card

Yes they can, that's sort of the point. Again - a cheque is a bill of exchange drawn on a banker. If the banker no longer provides that service, then it ceases to be valid.

There's nothing to stop you from writing them and giving them to someone, but that would likely be fraud.

Noble_Savage

John_Pierpoint wrote: »

It is not better for old people, some of them are proudly independent and can carry on until their signature degenerates and the bank notices.
Long before they get to that stage their wobbly fingers will be unable to key in the PIN number even if they could remember it.

Next step is then "put them in a home", where they will be miserable and costing the rest of us a fortune.
But I expect the technical nerds, who have worked out that it costs £1 to process a cheque have no idea that a significant proportion of the population have trouble seeing a PIN pad let alone using it.

I find all this talk of "what about the pensioners?" deeply condescending. It's as if some people assume that once you get to be over 60, you lose all your faculties and are resistant to change. My mum's in her 70's and she's going to be fine with this. She doesn't use internet banking but is happy with cards and PINs and her mobile phone.

There is now a real incentive for companies to develop alternatives for those instances where a card won't work. But instead of thinking about these, we're wasting our energies worrying about a sector of society, many of whom will be fine anyway.

Do they not have elderly people in Germany, Scandinavia, the Netherlands?

How do the current unbanked cope? Do they not get milk delivered or pay for the kid's school clubs?

How on earth did we cope before the 1960s, when most people didn't have chequebooks?

james_joyce

It's not just elderly people. I am 36 and I find cheques very useful in some situations, and internet banking very useful in others. Am I in the wrong "sector of society" as well? What sector is that exactly?

Extant

james_joyce wrote: »

The objections to cheques seem to be:

1) They are very expensive to administer, once you include the notional costs for fraud, 'inefficiencies', etc. I still haven't seen any figures about how much this total expense is, so we can see how it fits into the grand scheme of things.

Why would you? The costs of processing cheques is private information. The banks aren't obliged to share anything with you. It's not your decision to make.

Nor, as a point, are they obliged to process cheques in the first place - there's nothing to say that a bank could refused to accept cheques or issue them in the first place.

2) The world has moved on, we all need to get real etc, let's all start using BACS or PIN numbers - but obviously we need to hold onto cash because, erm, well because we like it and we are used to it!

Forgive me for not finding either of these to be terribly convincing.

Cash is a very, very small part of money supply by this point. Although it is useful for small payments etc. it's increasingly giving way to electronic payments. It will still remain useful for various purposes - use by foreigners, use in other countries, etc. - but its use in day to day society will decrease ever further.

james_joyce

There was me thinking it was my decision to make! Delighted to be relieved from that burden.

As I mentioned previously, my suspicion is that the cost is very low, in relation for example to the amount of money the banks have been paid (net) by the taxpayer during the banking crisis. Surely the banks can't pick and choose when and in what circumstances there is a legitimate public interest in their activities. If we are going to support the banks in their hour of need - which of course we always, rightly, will - then they have to have some regard to the public's needs as well. And that means the public as a whole, not just the younger or more tehcnically literate part of it.

Extant

james_joyce wrote: »

It's not just elderly people. I am 36 and I find cheques very useful in some situations, and internet banking very useful in others. Am I in the wrong "sector of society" as well? What sector is that exactly?

You find cheques useful now because that's one of the options currently available when it comes to payments. That fact alone does not make cheques any more valid as a payment method.

It's also a blind viewpoint - we've no idea what methods will be available by 2016. It's entirely possible, and very likely, that cheques will cease to be useful to you by that point.

Noble_Savage

james_joyce wrote: »

It's not just elderly people. I am 36 and I find cheques very useful in some situations, and internet banking very useful in others. Am I in the wrong "sector of society" as well? What sector is that exactly?

You're in the sector of "someone who finds cheques useful in some situations". And that's fine. It's the labelling of elderly people as change-resistant simpletions I find insulting.

But why all the hysteria? I feel like I'm about to repeat myself here, but it's a valid point so bear with me.

A deadline has been set at 2018. This means that companies, individuals and banks know that there's a very real possibility of cheques no longer existing after that point. So there's an incentive to think about alternatives. Some of them exist now. Some of them don't yet.

In 2016, the Payments Council will look at progress and see if the alternatives in place are sufficient that anyone at that time writing cheques for any purpose has a viable alternative. If, and only if they are in place (or will be by 2018) they'll signal the final OK for cheque clearing to be withdrawn in October 2018.

Does this sound like grounds for the apocalyptic responses to this news that we've seen in this thread and elsewhere?

Extant

james_joyce wrote: »

There was me thinking it was my decision to make! Delighted to be relieved from that burden.

As I mentioned previously, my suspicion is that the cost is very low, in relation for example to the amount of money the banks have been paid (net) by the taxpayer during the banking crisis. Surely the banks can't pick and choose when and in what circumstances there is a legitimate public interest in their activities. If we are going to support the banks in their hour of need - which of course we always, rightly, will - then they have to have some regard to the public's needs as well. And that means the public as a whole, not just the younger or more tehcnically literate part of it.

You keep mentioning "the banks" - the financial system compromises many more institutions than just the Royal Bank of Scotland and Lloyds Banking Group, the two banks who did accept government funds.

There's also plenty of regard to the needs of the public - the final decision will be made in 2016 on the basis of what methods are available then, not now. Setting a deadline helps to encourage further development of existing methods, or the creation of whole new ones.

james_joyce

I support the idea that the government needs to secure the stability of the financial system. I thought I had made that clear already.

Noble_Savage

james_joyce wrote: »

I support the idea that the government needs to secure the stability of the financial system. I thought I had made that clear already.

Yes you have. But you've also tried to draw some form of parallel between that financial support and the ongoing provision of a service whose days are numbered. You would like to make it a condition of the support, it would appear. I take the contra view.

Speaking as a part-owner of (some of) the banks, I'd rather they were spending 20p to process each payment than £1.00. It means I'll get my money back more quickly.