Review of developments in payment systems 2010: Cheques
Cheques have been in use in the UK for more than 100 years, but are now in terminal decline, so the UK Payment Council’s announcement of 31 October 2018 as the date for the closure of central cheque clearing came as no surprise, nor did the furore that followed it.
The UK Payment Council has committed to delivering cheque alternatives acceptable to users to ensure that consumers and businesses are not left high and dry when the closure occurs. It must do so, or businesses and consumers will fight to preserve cheques. The council needs to succeed to provide the banking and business world with an example of how to terminate inefficient and costly payment systems. It is becoming increasingly essential for the banks and regulatory authorities that payment transactions migrate to more cost-effective, attractive and easy to use payment systems. But the solutions need to be cost-effective, attractive and easy-to-use not just for banks and regulatory authorities but for consumers and businesses too. This announcement by the UK Payments Council is probably the most important development in payment systems over the past 12 months, proving that payment systems are simply products like any other, admittedly with a longer shelf life than most, but still products that can outlive their best-by date.
The furore about the announcement shows the importance of payment systems in the day-to-day life of consumers and businesses, a lesson the European Commission and the European Central Bank would do well to take on board before enforcing its ‘end date’ for national clearing systems in the SEPA region.