Australian cheques will remain in operation

Friday December 18, 2009

Cheque books in the UK have been officially given an expiring date of 2018 after it was approved in the Payments Council to abolish the system, with plans to introduce an alternative system.

Cheques have been phase out in the UK after it was established that the actual number of people that use cheques had dramatically decreased with many major stores chains and labels no longer accept the form of payment, including Marks and Spencer and Sainsburys, due in part to the attached processing costs involved.

From a banks perspective the phasing out of the cheque book system will save a significant portion of processing costs and funds as more consumers turn to the more convenient and far cheaper option of electronic banking.

In response to this action in the UK, Australian Bankers Association chief executive David Bell released a statement for the Australian bank industry clearly expressing that cheques will continue to be used in the Australian market for some time to come. However, he did note that cheques had diminished in popularity on the Australian bank market.

Use of cheques on the Australian market for the twelve months leading to September 2009

• 330 million cheques written in Australia
• Total value of $1 trillion
• Equates to 26 per cent or 113 million less than the same period the three years prior
• $250 billion lower than the same period the three years prior

"Until the mid-1970s when credit cards started to gain popularity, most people used cheques or cash for their purchases or to pay bills," he said.

"Today people are increasingly using convenient electronic transactions to make their purchases or transfer funds, such as via a card, internet banking or a bill payment service." Mr Bell stated in the release.

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