I can’t remember when I first wrote a cheque, but it was probably around 1987 when I was 20.
At secondary school we were taught how to write cheques. For my parents it was the main way of paying bills and using cheques seemed a natural thing to do.
When I ran my own business in the mid to late 90s, I used cheques extensively, but gradually switched to credit cards for fuel and Bpay or direct debit for regular expenses.
Today I hardly ever write cheques and my younger kids probably won’t be taught about them.
A 2008 study led by Professor Margaret Jackson, Killing the Cheque, concluded that cheque usage was continuing to decline in Australia.
“In particular, there appears to have been a significant decline in the use of cheque by businesses to pay suppliers and bills. All the businesses interviewed accepted EFT payments and EFT was the preferred payment channel, despite notification issues.”
A 2010 report by the Australian Payments Clearing Association (APCA) said: “For the last 10 years, the use of cheques in Australia has been declining steadily as consumers have access to a greater range of more convenient payment options … the marked decline in cheque use strongly suggests the future direction of cheques will need to be managed.”
The total number of cheques in use in Australia has dropped from 437 million in 2006 to 276 million in 2010.? Reserve Bank of Australia figures show that cheque use in Australia has declined by more than 35 percent in the last four years.
Earlier this year, the APCA announced a public consultation process to gather community views on the future direction of cheques in Australia.
Recent research found that 75 percent of consumers do not use cheques at all. However, five percent of Australians believe they would have a major problem finding an alternative to using cheques. These consumers are predominantly the elderly, rurally isolated and unwaged.
The APCA says cheques are in “irreversible decline”, which sounds like code for “on the way out”.
The consultation paper and submissions are online here.
There was concern the not-for-profit sector and pensioners may be adversely impacted. In the United Kingdom, the Payments Council proposed phasing out cheques by 2018.
The UK Government has argued that alternatives to cheques must be acceptable to small business and charities and that if cheques are abolished the Payments Council must introduce a paper-based replacement for them.
Personally, I have no problem with cheques being abolished, providing equivalent bank services are accessible and affordable for people on low incomes.
But this submission (below) clearly outlines why a transition period will be needed before cheques are phased out (if that’s to be the case):
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