Saturday, 6 November 2010

Stopping Cheques

Liberal Democrat Voice reports that two of their MPs, the latest being David Ward MP with a 10 Minute Bill, are attempting to gain their 15 minutes of fame by introducing a Bill for the retention of cheques within the banking system - a move prompted no doubt by the decision of the Payments Council to phase out cheque use by 31st October 2018. Ironicly, Paul Smee - Chief Executive, seems to have a problem with his calendar, when responding to David Wards ten minutes - but I digress.

The decision would appear to have been taken on the basis that use of cheques is declining and it is of interest that according to EurActive, Deutsche Bank are prophesying that migration to on-line banking will reach 60 per cent amongst those living in the EU by 2020. The Payments Council decision would seem to be driven by the Payments Services Directive (PSD) and also the Single Euro Payments Area (SEPA) to which they refer here and here. For those who speak 'EUese', the PSD can be found here and the background to the SEPA here. It will not have escaped the notice of those, who like me, spotted in that last link that there is a body called the "European Payments Council" which:
"supports and promotes the creation of SEPA through industry self-regulation. It defines common positions for core payment services within a competitive market place, provides strategic guidance for standardisation, formulates best practices and supports and monitors implementation of decisions taken."
Another point of interest is that included in the response by the Payments Council regarding the phasing out of cheque use:
"Given the steady fall in cheque use, the choice is between managing the decline and leaving developments to market forces.  The Payments Council believes that a managed decline is in users’ best interests as it offers a clear plan for bringing alternatives on stream and provides clarity and certainty to those organisations that process large volumes of cheques."
Leaving to one side the fact it is again obvious that 'crats' do not like 'market forces', spot the contradiction in that statement? Read it again: 'Given the steady fall in cheque use.....' it then continues: 'those organisations that process large volumes of cheques'. C'mon chaps, which is it? A decline or not?

I may be incorrect but I seem to recall that there is a timetable for the phasing out of cheques across the whole of the EU, but its not a directive, its an opinion, If memory serves me right it was from the The Directorate-General for Economic and Financial Affairs (DG ECFIN) ( but have been unable to track it down - so far.

When one considers that there is a European Payments Council and that the UK has a Payments Council - the 'smelling of a rat' grows, does it not? (As to my being a cynic, I can but ask: Moi???) In view of the fact that economic governance (and it will be every facet of economic governance) is fast approaching,  it would seem that Messrs Hunter & Ward (Members of our Toy Parliament) might as well save their breath!

Update: My sincere thanks to Ian Parker-Joseph ( a 'star' if ever there was one) who has found the source to 'phasing out of cheques' here - a most 'interesting' document!


subrosa said...

Interesting link WfW, I still use cheques because I'm not comfortable doing online banking and never will be.

sike said...

I am a web developer and I still use cheques because I too am very wary of internet banking.

Anonymous said...

Two points, a) I hate "direct debits" they are against all normal banking practice. It enables a third party to dip into ones bank account, by definition opening a portal to accounts.
b) Cheques are used for many things which cannot be paid by other means. subscriptions, charitable donations and thousands of others. This is an attack on us all and points to economic takeover of the UK. The EUro cannot be far behind!

James Higham said...

But where are you on the phasing out of cheques, WfromW?

Woodsy42 said...

Even for people who are happy to use internet banking there are, as Anon suggests, some payments for which no suitable alternative to a cheque exists.
Even if 90% of transactions were direct and the extra costs for clearing a cheque meant a small fee they should be retained.
But I can't believe there is no ulterior motive involved. The best rat I can smell is the fact that a cheque cannot be so easily recorded into a surveilance database.
My prediction is that cheques will be retained as a 'legacy' system to quiet the complaints but limited to small amounts, 50 quid maximum maybe.
What rodents or predictions do others do others come up with?

banned said...

I don't think that I have used a cheque for about 10 years, the last person I knew who did so was my old mum be she has since passed away.
I don't trust online banking either especially as mine advised "this is an online view of your account and does not necessarily represent your true positon" (or somesuch).

I pay my bills in cash at their offices and only use my credit card for buying stuff from Amazon.

Most petrol stations have refused cheques for ages and everyone gets pissed off waiting behind the old dear writing out a cheque at the supermarket.

Time for them to go and I don't see how the Govt. can force banks to keep them.

Woodsy42 said...

"everyone gets pissed off waiting behind the old dear writing out a cheque at the supermarket."

What do you do Banned on the day after you have moved house and BT won't fix your broadband for a fortnight? Or when you are paying for something remotely?
We are renovating a small hideaway in France and we use french cheques to pay electrician, plumber, local taxes etc. Maybe a friend has bought something for us or called someone in for a repair. These are small traders or people who don't have card facilities or distant tax offices.
The other options are cash or online - but to do that you have to be there in person or know their account details, while cheques can be posted safely from the UK to pay a bill.
As for queues, the french use them much more than we do and use fewer credit cards. Go to pay by cheque in a french supermarket, give them the blank and the till will print the rest for you to sign - faster and simpler than online pin card payment!
Yet oddly garages there stopped taking cheques for petrol sales at exactly the same time as here - which is why I see collusion. Cheques only work in one country so they are totally different clearing systems but acted together.

Derek said...

Cheques may be in decline, but their value is not replaceable with certain clubs and subscriptions. When the 'web' goes down, one is left with telephone banking, and another set of pin numbers etc to have to remember, or dig out fom some cache hidden somewhere you have forgotten it was so secure!

We are left with plastic over the phone line, or cash. How long will cashbe allowed? My bank, now sadly of Spanish origin, have stated they will be phasing out cheques at the end of next year - 2011.

I'll be stocking up on Tea caddies and biscuit tins. Our reliance on plastic and online banking, direct debits and standing orders can be managed directly from that platform - and I do - is, I'm afraid, a net to catch many Mackerel.

banned said...

@Woodsy42 "What do you do Banned on the day after you have moved house and BT won't fix your broadband for a fortnight?"

I have no idea but the fact is I have not needed to use a cheque for a decade; your experience in France is clearly different and I do take your point about their petrol retailers colluding with ours in rejecting cheques and am wondering what that might be about.