No More Cheques?

Posted by Allison on 5 April 2009, 10:49

The whole subject of money and currency is a fascinating one, especially the changes that have occurred through the years as our lives have changed and we have demanded more and better ways to be able to pay for anything we buy.

In the past, back in the middle of the last century, credit cards were first invented and they certainly took off in a big way, indicating that people were ready for this new invention.  Nowadays it could be argued that they brought more harm than good, since so many people are now in debt largely because of the behaviour they have exhibited since being given one of these cards with an impressively high credit limit.  This has happened in many countries, regardless of what currency they use.


Another major move is happening at the moment, and it concerns cheques.  Perhaps we could even trace the beginning of the end for cheques right back to when those pieces of plastic were first introduced, since they gave us a new way to pay which meant we didn't have to take our cheque book out with us any more.

If you have been shopping lately you will no doubt have noticed that many shops and outlets have taken the decision that they will no longer accept cheques as a form of payment.  In years gone by they used to be a regular sight in shops, with cashiers processing them quite regularly on a daily basis.  But a card is so much easier to use – you don't need to write anything out, you just need to sign your name when asked.  And now that is even easier, since the new Chip and Pin system came in.  All you need to do is pop your card into the reader, enter your four digit number when prompted and that's all there is to it.  It's quick, easy and very efficient, both for the staff and for the customer.

So is this really the end of the humble cheque book as we know it?  To find the answer we should consider how we do still use it.  Cheques are still accepted by companies who send bills out to customers through the post; while they offer a multitude of other ways to pay the amount owing, a cheque can be written out, popped in an envelope and sent straight back to the company.

With that said though, the same process can also be done with a credit card.  We are usually provided with a slip of paper on which we fill out our details and then return it the same way.  Many people dislike this method however, since there is a slim chance that our details could go missing in the post or be intercepted by someone else.  They would then have all the card details in their hands – the next best thing to having the card itself.

So we've seen that while other methods of payment are acceptable in this way, cheques are still often used to send payment through the mail.  What about online payments though?

Many websites only take electronic payments nowadays.  It is quite rare for a major company to accept cheques, although you can still sometimes see it listed among the payment options.  In truth, the percentage of people who do still pay by cheque for online transactions is so small that most companies would rather lose the odd customer or two in favour of having a much easier time processing all the payments they receive by other methods.

It's also clear that when people buy something online they want to be able to receive it as soon as possible.  Cheques don't exactly encourage this to happen!  Firstly you buy the item and send off your cheque, which may take a couple of days to arrive at its destination.  It then needs to be processed, and depending on who you are buying the goods from you may have to wait several days for it to clear.  Once that has happened, your goods will be sent out.

So if you buy something and pay by cheque, you could be waiting seven to ten days for it – perhaps even longer than that.  If you pay via an online payment processor such as PayPal however (or alternatively pay by credit card using a secure server and online form) you can receive your goods as quickly as the next day in some cases.

So are the days of our chequebooks numbered?  Despite the fact that they have been around for many years, it seems that they just don't have what it takes to continue long into the 21st century.  Some banks are also making it much easier and safer still to pay for items online, by starting to consider providing people with simple card readers to use at home.  These would be similar to the ones you use in regular shops, but they are designed to be used in conjunction with your home computer.

The next step is to make sure that everyone is able to use all the other methods of payment offered, to render the chequebook into nothing more than a worn out entity which had its place many years ago, but not today.  One suspects that it is the older generation which uses cheques more often than anyone else, and with many more shops and outlets refusing to take them, even the older generation will have to get used to using Chip and Pin eventually.  Either that or it's back to coins and banknotes.

So it may be a while yet before the chequebook disappears altogether, although when it does happen it may be with a whimper rather than with a bang, since the majority of its power as a form of payment disappeared longer ago than many of us might think.

Now is certainly the time to make the most of it, since we may not be issued with them for much longer at all.