Cheque mate: game over for cheques?

3 July 2009

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!

TOPICS:   Credit Cards   Banking


  • Joff
    Cheques are still widely used for B2B payments. If you want to protest about being unable to pay by cheque at a supermarket, just fill a trolley with luxury ice cream and when you're refused at the checkout, just abandon the trolley and walk off.
  • Esther82
    I used cheques to pay my driving instructor - much better than having to carry the cash around - especially with the prices they charge nowadays! Also - how would grandparents give you money for your birthday without cheques?
  • Inactive
    Until the Banks come up with a proper and suitable alternative, cheques will hopefully be here to stay for certain transactions.
  • Tom
    lets face it - only people over 70 use cheques and these people will all be dead soon so we wont have to worry about it anymore.
  • Roy
    They've managed on the continent for years. France has chip and pin for 16 years! Many countries you'll get a tradesman to your house, he will happily do the work and send an invoice in the post and pay it online. In the old days you just popped into the hight st bank to pay him. I remember in the UK when you offered to pay by cheque he would say "you'll have to pay the VAT then" Dodgy as.
  • The B.
    You missed the old classic, going out on the lash on a Friday when you get paid on the Monday, most pubs used to accept cheques (certainly our locals did as they knew us).
  • Tom
    When there's no longer a need for cash what will all the drug dealers and tax evaders do?
  • Sam
    "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." I couldn't withdraw this amount from my bank as I recently found out that Nationwide bank let you withdraw a minimum of £31 now. Ridiculous
  • Inactive
    " lets face it - only people over 70 use cheques and these people will all be dead soon so we wont have to worry about it anymore. " Don't try to open a building society account then if you are under 70, many still insist on cheques. How do you pay small traders like window cleaners if you have no cash?
  • me
    hmm, what about for deposits and things at rental places? if they take it from your card, that £100 or whatever comes out of your account completely, if you hand them a cheque they only have to cash it when youve damaged/stolen the rental item! Gf works in a fancy dress shop and that is how they opperate, without cheques its a hassle...
  • veedubjai
    Problem with cheques is it takes time to wait for money to be cleared & if it gets bounced then the receiver could be not been paid. The Payee could have left the country & disappear. Much safer with bank cards, cash, bank transfer via CHAPS as at least you get your money on your own bank account. I don't want to wait for someone to pay me.
  • Tom
    If it's the window cleaner you either make sure you have cash or just ask for their sort code and account number. Don't see why you need building society accounts. The fancy dress deposits - these payments are instant so all it takes is a payment back in the other direction - its more secure for the shop this way too as cheques can be cancelled!
  • David
    Re: debit/credit card refunds. These take 3 days to go back, and only one day to come out hence leaving you out of pocket for 4 days.
  • KateBReynolds
    What is the correct phrase ... super, brilliant idea
  • high e.
    I must admit that this is one great insight. It surely gives a company the opportunity to get in on the ground floor and also really take part in creating something special and tailored to their needs.

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