Can you imagine world without checks?

November 24th, 2009

Say goodbye, checks may be on the way out.
According to various reports, bankers are busy working on an alternative plan, which is already controversial, and which may signal the end of the check-writing era. It is expected that bankers will be voting next month for the checkbook to be consigned to history. It all sounds pretty revolutionary. Anyone alive today and who keeps his money in the bank has been writing checks his whole life. The move is already being criticized by consumer groups, business lobbyists and groups representing the elderly before they even see what the alternative is. The fears that they are raising are sound: vulnerable people who have relied on their checkbook all their lives will be left confused. A new system will require re-education of the masses. Remember, the checking systems is global – all people on all countries use it.

Goodbye to checks?
Checks were first used in Britain 350 years ago. They are an expensive form of payment for banks, costing around £1 each to process, which is four times as much as electronic payments. At their peak in 1990, around 11 million checks were written every day in the UK. Latest figures show the number has dropped to around 3.8 million. Many people are already opting to pay by direct debit or bank transfer. A growing number of stores in the UK, including John Lewis and Tesco, have stopped accepting checks. Stores claim they are the most insecure form of payment and that abolishing them cuts queues at checkouts.

Still used
But checks are still widely used for making payments to local tradesmen and for utility bills. Government departments, such as Revenue, Customs, Income Tax and the Department for Work and Pensions, rely on checks to make millions of payments each year.

The seniors
Andrew Harrop, head of public policy at Age Concern and Help the Aged, said: ‘Many older people use checks and cash for all their transactions and are uncomfortable with alternative payment methods, such as credit or debit cards with PIN numbers. Sandra Quinn, a director of the Payments Council, said: ‘We are completely aware that elderly, disabled and disadvantaged people need alternatives to be in place. To prevent older people becoming financially excluded, any plans to end the use of checks must ensure there are alternative ways of paying which they understand and are happy using.’

When
The most likely date for checks to be phased out in the UK is 2018 meaning that the banks are anticipating a long lead-in time for such a dramatic change. This is going to mean major change that will affect every part of our lives. Checks are used between private people, as gifts, as payment and as deposits. Checks are used to instruct the bank to make a payment. Checks are used locally and internationally and there is even
The Geneva Convention of 1931 on the unification of the law relating to checks.

This entry was posted on Tuesday, November 24th, 2009 at 9:57 am and is filed under Employment, Finance. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.

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