Wednesday, July 13, 2011
Chequemate?
The decision by the banks to abandon plans to scrap cheques is very welcome but is there a bit of smoke and mirrors going on as well. The Financial Times reports that the controversial plan was scrapped after banks were warned in parliament that they had “scared the pants off middle England”.
They say that worried members of the public sent more than one thousand letters and emails to MPs after it was announced that the 350-year-old payment system was to be phased out by late 2018. The final straw for the banks appear to have been when the government indicated it would intervene unless a suitable alternative was found.
This change of heart is particularly significant for the hundreds of small businesses who were concerned that the removal of cheques would drive up their costs and end up putting them out of business. It means that those small businesses and tradesmen who rely on cheque payments can now be sure of their future.
However, as an individual who uses cheques when necessary because I do not trust internet banking, and also to buy certain goods and services, there is an additional obstacle, whose significance has not come fully to the fore. This is the allied decision not to allow debit cards to be used to guarantee cheques anymore.
What this effectively means is that the use of a cheque as currency has been undermined and it is possible that it will whither on the vine anyway.
They say that worried members of the public sent more than one thousand letters and emails to MPs after it was announced that the 350-year-old payment system was to be phased out by late 2018. The final straw for the banks appear to have been when the government indicated it would intervene unless a suitable alternative was found.
This change of heart is particularly significant for the hundreds of small businesses who were concerned that the removal of cheques would drive up their costs and end up putting them out of business. It means that those small businesses and tradesmen who rely on cheque payments can now be sure of their future.
However, as an individual who uses cheques when necessary because I do not trust internet banking, and also to buy certain goods and services, there is an additional obstacle, whose significance has not come fully to the fore. This is the allied decision not to allow debit cards to be used to guarantee cheques anymore.
What this effectively means is that the use of a cheque as currency has been undermined and it is possible that it will whither on the vine anyway.
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"This is the allied decision not to allow debit cards to be used to guarantee cheques anymore.
What this effectively means is that the use of a cheque as currency has been undermined and it is possible that it will whither on the vine anyway."
I agree with Peter, doing away with checks would/will be a disaster. But at least checks/cheques are still currency. I'm from Cardiff/Wales but help run a small business in the USA which I co-founded. We prefer cheques over credit card payments because whenever a customer pays by credit card we lose a chunk of change. There's no charge on depositing checks.
CWood
What this effectively means is that the use of a cheque as currency has been undermined and it is possible that it will whither on the vine anyway."
I agree with Peter, doing away with checks would/will be a disaster. But at least checks/cheques are still currency. I'm from Cardiff/Wales but help run a small business in the USA which I co-founded. We prefer cheques over credit card payments because whenever a customer pays by credit card we lose a chunk of change. There's no charge on depositing checks.
CWood
# posted by 
: 7:19 PM
: 7:19 PM
Currently, the only time I write out a cheque is to pay for periodic utility bills. This is not because I don't trust online payment, but because the utility companies only offer two types of payment plan, (a) direct debit, and (b) periodic cheque payment. The reason why I haven't signed up to direct debit for utility bills is that they take payment for 'estimated' bills, which is not the amount I owe. I would like to 'input' my meter readings online, and then make payment for the exact amount I owe, online, but very few utility company allow this. A law must be passed to force utility companies to provide this payment option, before cheque payments are withdrawn. It is quite evident that utility companies are currently using 'direct debit' as a method of enriching their cash flow rather than just collecting the amount owed at the time it is due. The only alternative at the moment is to pay by cheque in the post.
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