Cheque it out - CHAPS!
Posted: 28th May 2010
It had a 350th birthday last year but for a decade the cheque has been in serious decline. In the course of the next eight years, we can expect it to disappear.
The Payments Council has acknowledged the need, in the face of a 40% drop in the use of cheques over the last five years, to manage pro-actively the planned retirement of one of the establishment figures of commerce far and wide.
The Council warns that “the payments industry has to rise to the challenge of finding easy-to-use efficient alternatives for these payments and to ensure that they are easily accessible and well understood by cheque users”.
The strategy is to incorporate a scheduled review in 2016 to consider whether sufficient progress has then been made to press on and close down central cheque clearing facilities two years later.
Few if any of our readers will be strangers to electronic payment methods. We all know by now that it is a lot less hassle to receive a payment direct to your bank account than it is to pay in cheques or cash.
BACS or (if it is urgent) CHAPS is now our preferred method of payment to suppliers and clients who are happy to provide bank details and receive funds electronically. Others should not worry - we still hold cheque books...at the moment!
We are also very happy to receive funds by bank transfer. It is generally quicker, cheaper and more environmentally friendly.
And what of good old-fashioned cash which in various forms has been around for much longer than 350 years? Well, this was the month in which the Serious Organized Crime Agency (SOCA) reported that more than 90% of use of the €500 bank note had been by criminal gangs, drug dealers and money launderers.
SOCA concluded that “there is no credible legitimate use for the €500 note in the UK in the volumes currently supplied, and easy access to them in the UK is a key enabler of criminal activity, allowing criminals operating here to move large volumes of cash effectively”.
The €500 note takes up less than a tenth of the space of sterling alternatives with the result that it is easy to hide around £17,000 in a cigarette packet or, for the more adventurous, swallow the equivalent of nearly £130,000.
All the same we reckon we shall be hanging onto our petty cash tin, even though it only has enough in it for a pint of milk!