Are checks (in British spelling, cheques) going the way of the horse and buggy? On December 16, 2009, the 350th birthday of the check, the Payments Council Board of the United Kingdom agreed to set a target date of October 31, 2018 to close the Central Cheque Clearing.

The Payments Council is the organization that sets strategy for UK payments. It was been established to ensure that UK payment systems and services meet the need of users, payment service providers and the wider economy.

So why the phase out? Many people are already using alternatives to the check: PayPal, debit and credit cards, online bill paying and payment by phone, to name a few. As technology for electronic payments continues to improve, the Council had to decide whether or not to continue to support an antiquated system in dramatic decline:

• In 2007-2008, the vast majority of major U.K. retailers stopped accepting checks.
• In 2009, just under four million checks are written each day in the U.K., compared to 14.8 million debit card payments.
• Although check use has been in decline since 1990 and has fallen by 40% over the last five years.

In making the decision to close the Cheque Clearing System, the Council faces the challenge of how to best ease people into new payment systems. There are still plenty of situations where checks are used extensively:

• payments between individuals
• payments to sole traders
• payments to small businesses, clubs, charities and schools

The Payments Council wants to ensure that consumers and businesses are not left high and dry when the closure of the clearing occurs, prevent confusion and deliver check alternatives that are acceptable to check users. The 2018 date was thought to allow plenty of time for people to transition to the new payment styles, and ensure there is no scenario where customers, individuals or businesses, still need to use a check.

Opponents are worried that the elderly and the “vulnerable” will be left in the cold. In addition, they are worried that banks will start charging for alternative payment systems. (Ridiculous, because it’s cheaper to process electronic payments than checks.) The payments industry has been charged with finding easy-to-use efficient payment alternatives and to ensure they are easily accessible and well understood by current users of checks.

Could this happen in the U.S.? I don’t see why not. Though I still use checks for business, it would be nice to be able to get rid of those things, if not for easier record keeping then avoiding the drive to the ATM to deposit them.

What do you think – would you like to eliminate checks from the banking system? Leave a comment and tell us what you think!

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