Cheque mate: game over for cheques?
We've all been there: in the long line at the supermarket, with one item in our hands, watching the clerk ring up dozens of items. As frustrations rise to stratospheric levels and the cashier announces the total, then the customer starts digging around, and pulls out... a cheque book.
Most likely, the offending cheque-writer is a little old lady. We feel a slight twinge of guilt for wishing her ill as she asks for a pen, and finally completes the transaction and frame-walk out the store.
But those days are gradually coming to an end.
Cheques as a form of payment are dying out, according to the Payments Council and the BBC. Others report that cheque guarantee cards will be phased out altogether by the middle of 2011. However, people will still be able to write cheques after that, and businesses will still be allowed to accept them. Several major retailers including Tesco, Boots, and Marks & Spencer no longer accept cheques.
And yet, with all the other payment options available, there are a number of arguments people use for the preservation of cheques. Here are five of them:
1. Paying Bills: Mailing a cheque to pay a bill is very convenient. Cheques are also convenient for paying tradesmen. Cheques are still one of the easiest ways for small businesses to handle small amounts of cash.
2. Safety: It's safer to send your child to school with a cheque for various fees than with cash.
3. No Frills: Cash machines only allow withdrawals in multiples of £10. Therefore, if you need £21.50, you have to withdraw £30, thereby removing £8.50 that won't be available for things like bills. The alternative is visiting your bank branch to get the exact amount, but that's probably even more backwards than writing a cheque.
4. Old School: Some private landlords prefer payment by cheque. Usually ones who have never heard of a thing called bank transfers.
5. Mail: Mailing cheques to nieces/nephews/grandchildren on birthdays or other events is convenient.
Of course, every one of these points can be refuted. Credit and debit cards are extremely popular and useful. Direct bank drafts are easy to set up online. Schools are beginning to come round to other methods of payment, such as online transactions. Cheques cost the banks extra in terms of processing time and expense...
For every argument for the use of cheques there is at least one against it.
Taking a look at online discussions on cheques over at MSE, there is a clear split between those who say that landlords, small merchants, schools, etc. simply must adapt and those who believe that having a cheque book on hand will always be a good idea. The conventional wisdom is that by the time cheque guarantee cards are phased out, enough retailers will stop taking cheques that even the most entrenched cheque writers will be convinced to adopt other methods of payment.
Tell us what you think. Are you a cheque writer? Do you have your own small business that relies on cheques as a form of payment? Do you hate cheques and consider those who write them to be troglodytic nincompoops? Let us know how you feel about this increasingly marginalized form of payment in the comments below!