Wednesday, 13 July 2011
A couple of years ago banks put pressure on the Payments Council to abolish cheques and this resulted in the announcement that the national cheque clearing system would be phased by 2018.
The banks insisted 'only a few' used them and plastic was the preferred method of payment, but the truth is that cheques are more expensive for banks to administer and it was nothing to do with the number of cheques - around 1.1 billion - which are written in the UK every year. The reduction reflects the high street's decision to stop accepting them at tills, but some small shops continue to welcome them.
I have a cheque book and although I don't use it as regularly as I once did, I still use it to send money to various children for birthdays and Christmas and to pay local bills. The demise of my cheque book would not be filled by electronic banking or plastic, unless I spoke to each child's parent and asked for a bank account which could be used to transfer a small gift. It wouldn't be worth the hassle.
However the Payments Council, having been soundly blasted by charities who very occasionally do represent their older client group rather than their own self-interests, has backed down.
Regularly older folk are having their lives disrupted by 'modern' technology overtaking many tried and tested methods, but the proposal to rid ourselves of cheques was just wrong.
How will the banks respond? Quite probably by taking even longer to process a cheque. Forty years ago a cheque was cleared in 3 days. After that time we were confident that the money was in our bank accounts. Nowadays as soon as a cheque is presented the bank adds the sum to the relevant account, yet it can take up to a fortnight for it to clear. My bank states 'the usual clearance time is 5 working days' - note the word 'usual'. How strange it is that modern technology takes so much longer than the old-fashioned paper exercise of a few decades ago.
I see the banks reacting by making a charge for each cheque as they do with business accounts. Nevertheless I'm pleased my cheque book isn't to become redundant. A few children will be too.