The Death of the Cheque

Back in 2009 the UK Payments Council, the organisation which sets the strategy for UK payments, announced that the good old-fashioned cheque would be phased out by 2018, but now it seems to be having second thoughts.  Chairman Richard North now says that a decision on whether or not to scrap the cheque will be delayed until 2016 at the earliest.

I’m not sure I would miss it much myself, because I don’t write more than one or two cheques a year these days, but its demise is feared by some people, notably the elderly and charities.

There are concerns that some older people, who have spent most of a lifetime relying on the cheque book to manage their finances, may resort to using cash instead, putting themselves at risk of loss or theft of their money.  Charities are worried because many of them depend on the cheque as their main source of income from donors.

The cheque is a paper-based payment method which has been around for many hundreds of years, although there seems to be some dispute as to its exact origins.

According to the website of the Cheque and Credit Clearing Company, its roots lie in 13^th century Venice, then an important centre of international trade, with the need for a method of paying for large amount of valuable goods without resorting to dealing in huge and cumbersome quantities of gold or silver.

Wikipedia cites some even more ancient origins, including an early form of cheque known as praescriptiones, used by the ancient Romans  in the 1st century BC, and the Adesha, a type of bill of exchange used in India during the Mauryan period (321 to 185 BC).

The first cheque ever written in the UK was issued by Nicholas Vanacker over 350 years ago, instructing Messrs Morris and Clayton to pay £400 to Mr. Deboe.

Famous cheque users include Terry Wogan, whose infamous Blankety Blank Cheque Book and Pen was the highlight of British prime-time TV viewing throughout the 1980s.  And who could forget the scene in ‘Slumdog Millionaire’ where Jamal receives the giant cheque for One Million rupees on the Indian version of ‘Who Wants to be a Millionaire’?

So is this the end for the cheque as we know and love it?  Many small businesses in the UK are praying that it is not the end, as they still receive cheques in payment for the bulk of their transactions.

In a recent House of Commons evidence session, Treasury Select Committee Chairman Andrew Tyrie described the announcement as "colossal error of judgement".  Conservative MP David Ruffley accused the Payments Council of ‘rank incompetence’ over the issue.  After receiving more than 1,200 letters on the subject, the Treasury committee has reopened its inquiry into plans to phase out cheques.