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When are Cheques Due to be Phased Out? Will Cheques be Phased Out in the UK? When are Cheques Stopping?

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When will Cheques be Phased Out?

The decline of the cheque, once an essential mechanism for transferring cash from one business or person to another without having to handle big bundles of cash, has long been as inevitable as the demise of black and white television or the phasing out of the mangle.

To put it at its simplest, no matter convenient a particular way of doing things may be it will enjoy a useful existence only until something comes along that is more efficient, faster, easier, safer and less expensive to process. ATM machines for drawing out money, debit and credit cards for making payments, online processors for effecting them and BACS transfers for moving money from one account to another in the blinking of an eye combine to render the once old faithful cheque unnecessary and irrelevant.

As is so often the case, there is a financial imperative to the controlled extinction of the cheque as well. Cheques, once they have been paid in, have to be physically handled and then processed. Monies then need to be deducted from the account of the issuer and entered into the account of the payee. This all requires some human input, and even in today’s market humans have an irritating

habit of expecting payment for their work. The computerisation of the whole process eliminates the need for human participation in the transaction as well as, in theory at least, the capacity for error.

For the user too the process is so much more convenient. Issuing a cheque requires it first to be written, then given or posted to the recipient who will need to physically take it to the bank to be paid into an account. Then there is a waiting period during which the funds contained therein are being cleared, which means in essence that for some three days or so they belong neither to the issuer nor to the recipient although they remain available for the bank to lend out.

So how and when will cheques be phased out?

So it is that a change to a more efficient, and cost-efficient system, has long been on the cards. But when will cheques be phased out? The answer to that question is that there is every intention to phase them out by October 2018, but this deadline is qualified by the stipulation that adequate alternatives will by that time need to be fully in place. Consideration needs to be taken of the fact that some account holders do not have Internet access and have no desire to acquire it, and so an offline alternative to BACS will need to be considered. Some of those which have been mooted, such as payment through a mobile telephone, are likely to encounter the same objections as Internet banking and the National Pensioners’ Convention has described the plans to phase out cheques as “selfish” and “out of touch with the way millions of older pensioners manage their affairs”.

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