Cheque-ing out

Although the Payments Council has reversed its decision to scrap cheques, the Council’s description of them as being in ‘terminal decline’ looks accurate, even if they can be useful on occasions.

The total number of cheques written in a year dropped from a peak of 4 billion in 1990 to fewer than 1 billion in 2010. Many businesses are no longer accepting them – partly due to the abolition of the cheque guarantee card. Even without the Payments Council’s reprieve it seems that the fate of cheques has been sealed.

Despite the about-turn, in the second decade of the 21st century there is no reason for not using electronic payments. Although paying suppliers by cheque may give a perception of greater financial control, postal delays and the processing time involved means that it is impossible to know when funds will be debited, and lost cheques can cause major problems. The use of electronic payment methods such as BACS and the more modern Faster Payments Service mean that a business will know exactly when payments are to be made. Online banking provides an easy solution for smaller businesses.

Customers can be encouraged to pay electronically by including the bank sort code and account number on all invoices, while retail businesses have a choice of various cash (PDQ) machines, including fully mobile ones, to accept customers’ debit and credit cards.