The death knell has sounded for the
cheque in the UK, with the Payments Council’s (PC) decision to set
31 October 2018 as the date for closure of central cheque
clearing.
The payment industry body’s decision followed
18 months of consultation and research into the current use of
cheques and where alternatives must be developed.
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Cheque use peaked in 1990 at 4 billion. It has
since fallen steadily to 1.4 billion in 2008 and an estimated 1.25
billion in 2009. In the absence of actions to terminate cheque use,
the PC estimates cheque volumes will be 602 million in 2018 – 260
million made by individuals and 342 million by businesses.
The use of cheques dates back to 1659, when
the Morris and Clayton Bank had a cheque drawn against it for the
then-substantial sum of £400.
According to the PC, assuming an end of cheque
use, there will be ongoing annual cost savings to banks of about
£200 million ($325 million) in 2018 and about £750 million to large
companies and the public sector.
“The real challenge lies ahead if we are going
to be comfortable to wave good-bye to the cheque,” said the
council’s CEO, Paul Smee. “The payments industry will have to react
positively and take the lead on delivering solutions.”
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