The bell has tolled for Britain's checks

The sentence: death. The crime: inefficiency. The end of checks as a financial instrument has been foreseen for some time, and as of Wednesday the date of their expiration in Britain is set.

However there is time left to put any outstanding affairs in order. It won't be until October. 31, 2018 when the nation's check clearing system is suspended, and that is conditional upon a suitable alternative being found.

The UK Payments Council made the announcement and said checks would be phased-our gradually.

"There are many more efficient ways of making payments than by paper in the 21st century, and the time is ripe for the economy as a whole to reap the benefits of its replacement," Paul Smee, the council's chief executive, said in a statement.

Rapid decline after three centuries

The oldest surviving check in Britain was written in 1659 by Nicholas Vanacker, who paid 400 pounds (42,000 pounds or nearly 68,000 dollars) to a Mr. Delboe and drew on Messrs Morris and Clayton, scriveners and bankers of the City of London.

In those days, checks would have been exchanged informally in coffee houses. It was not until 1833 that the first clearing house was built in London to exchange checks.

However, the use of checks has fallen drastically in the past 10 years as more consumers transfer money electronically, by direct debit or with debit and credit cards. Last year, around 3.8 million checks were written every day in Britain, compared to a peak of 10.9 million in 1990, the council said.

Several groups oppose

Those who don't use credit cards may keep cash and be vulnerable to crime

Opposition to the planned phasing-out of checks has come from several quarters including small businesses and charities serving the elderly.

Stephen Alambritis of the Federation of Small Businesses says ending the use of checks is a bad decision.

"We need to keep them because we need to afford to small businesses and to elderly people as many choices as possible in terms of payment," he said. "They are a mark of trust and confidence. Only 7 percent of checks are backed by a guarantee card; for the remainder there's a huge amount of trust and confidence between the traders."

At least 6.4 million Britons older than 65 have never used the Internet, according to Vicky Smith, a spokeswoman for the charity Age Concern.

"Chip and pin is problematic for many older and housebound people," she said. "Without cheques, we are very concerned people will be forced to keep large amounts of cash in their home, leaving them vulnerable to theft and financial abuse."

Contingent on alternatives

While the decision is contingent on finding suitable alternatives, Mark Bauerman of the UK Payments Council insists they already exist.

There are "internet payments, phone payments, card payments, paypal, but obviously yes, there are some situations at the moment where cheques do seem to be one of the only options," he said. "What we'll be looking at over the next four or five years is developing alternatives for situations like that and making sure those alternatives are communicated to people and that people are indeed using them."

A final review of the decision will take place in 2016.


Author: Olly Barrat (gps)
Editor: Andreas Illmer