Checkmate for outdated chequebook
THE humble cheque, that little piece of rectangular paper thought to have been first used by the ancient Romans in its earliest form a hundred years before the birth of Jesus Christ and marked the beginning of the creeping move towards a cashless society, may soon be a thing of the past.
Last week the Australian Payments Clearing Association (APCA), which is made up of banks and credit unions, announced it would gauge the community’s view on the future of the cheque.
“Cheques are clearly in irreversible decline,” APCA chief executive Chris Hamilton said. “The consultation process will help us identify why certain consumers and businesses are still using cheques when other safe, efficient and cost-effective payment options are available.”
The first form of a cheque – a type of bill of exchange that was development so people didn’t need to carry around large amounts of gold and silver – was first used by the Romans, and most if not all civilisations since.
Yet it was not until the 20th century that it became a highly popular method for making payments.
Ironically its use peaked in the 1990s, just as the banking sector was embracing new technologies like ATMs and electronic transfers.
Southern Cross Credit Union head of sales Andrew Tucker believes these new technologies will sooner rather than later spell the death of the humble, and until recently ubiquitous, cheque.
“We have seen a huge fall in the number of cheques used in recent years,” he told BetterBusiness.
“It will eventually mean the death of the cheque, although some people still find them a good way to make transactions.”
Mr Tucker said apart from the ease of electronic transfers such as direct debits and Bpay, cheques can take days to clear and are costly to process.
According to the APCA, it costs an average $7.69 to process a cheque, compared with as little as 50 cents to $1.10 for a credit card purchase.
And while 276 million cheques were process last year, the Reserve Bank of Australia says there has been a 35% decline in usage over the last four years.
Recent research commissioned by the APCA also found that 75% of customers do not use cheques at all.
However, it also found 5% of bank customers believe they would find a major problem finding an alternative to using cheques. These were mainly the elderly, rurally isolated and unwaged.
Mr Hamilton said convenient, cost-efficient payment options should be available to all Australians, irrespective of age, economic status and location.
“As the payment system continues to evolve, we need to identify and deal with any barriers to using safe and efficient electronic payment options,” he said.
Submissions to the consultation ( www.apca.com.au/consultation) remains open until July 29, but it seems the expression “the cheque is in the mail” may soon become an historic oddity whose meaning will be pondered over by future generations.