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Last Updated: Thursday, 27 November 2003, 11:10 GMT
Chequeing out
By Jonathan Duffy
BBC News Online Magazine

After more than 300 years, the trusty old cheque is about to disappear forever. But will we miss it?

The cheque's in the past.

Cheques, which date back to the English Civil War, are in rapid decline as a means of payment. The latest nail in the coffin came this week with the announcement that Britain's biggest cheque printing plant is to close.

Cheque volumes have already declined by 40% since 1990 and are expected to fall by a similar amount over the next 10 years. Some forecasters even think they will have disappeared by the end of the decade.

In a recent survey for the Halifax, a third of people predicted their use of cheques would fall over the next three years.

In place of the paper slips there are now a range of payment options that tend to make life easier for us, the consumers, while being cheaper for the banks that run them.

There is a love affair with the chequebook which will be hard to end - writing a cheque gives you a feeling of control
Anne-Marie Kesselman

Whipping out a debit card at the supermarket checkout saves time over teaming up chequebook and cheque guarantee card. And paying by plastic avoids the irritating spending limits on cheques.

The rise of telephone banking and, more recently banking on the internet, have seen account holders become accustomed to transferring money electronically.

At the same time, the cheque-writing faithful are being squeezed by the trend for Direct Debit as a means of settling bills. Many companies, such as O2, Vodafone and Telewest, are surcharging customers who prefer to pay by cheque.

Undoubtedly, there are advantages to letting go of this antiquated payment method. Recent research found many of us don't have the time to pay in cheques we receive.

Sentimental side

Apparently, only 14% of people manage to bank a cheque on the day we receive it. Some 900 million cheques a year are waiting to be banked.

Ahh, the cheque presentation. Where would charities be without it?
Yet not everyone is happy about giving up their cheque book. The Halifax survey revealed more than a third of respondents were against phasing out cheques.

Many of us still have a sentimental attachment to our dog-eared chequebooks, says Anne-Marie Kesselman, of Bacs, which oversees electronic payments in Britain.

"There is a love affair with the chequebook which will be hard to end. You can touch it, flick through it. Writing a cheque gives you a feeling of control - you are actually making out a payment instead of just signing a debit card slip."

When it comes to mammon, emotional attachment cannot be underestimated - witness people's strong emotions in the debate about the euro.

Loophole

But paying by cheque also makes financial sense. Unlike a debit card, where the funds are immediately deducted from an account, cheques come with about three days grace - the time they take to clear.

The typical consumer writes 2-3 cheques a month but receives only eight a year
The average personal cheque is for 153
Small business are still wedded to their chequebooks - just 5% of invoices are paid electronically
In the monthly run up to pay day, when finances are frequently tight, it can be a useful loophole to exploit.

If those arguments fail to convince, think about the 20 cheque that flutters from the birthday card sent by your far-flung granny or distant aunt.

"It's those sort of personal gestures that people will continue to use cheques for." says Catherine Wike, of the Cheque and Credit Clearing Company. "For something like that there is no replacement yet."

Finally, cheques have spawned a language that has yet to extend to electronic banking. The cheque's in the post, blank cheque, cheque book journalism. Whoever heard of a bouncing debit card?


Some of your comments so far:

I'd hate to give up my cheque book. It's my life-line for the last few days of the month. I know I can write a cheque for shopping on a Wednesday and it won't clear until I've been paid on the Friday.
Kevin Miller, Scotland

I have a Finnish colleague who had never seen a cheque book until she came here. When she went home, she mentioned cheques to her dad. He replied that he vaguely remembered his dad using them. In case you're wondering how they get by, it is possible to transfer money to your friend's accounts using the bill payment facility on cash machines or internet banking sites!
Luke, UK

The main use I make of cheques is to pay my credit card bills!
John, UK

I get paid by cheque, I pay 90% of my bills by cheque - it's so easy to keep control of. They can't get rid of cheques - my financial world will ground to a halt!
Fi, England

Small businesses which can't afford credit/debit card fees still rely on cheques - for example the only cheque I write on a regular basis pays for my evening classes as they don't accept cards. Will I have to use cash in future?
Alison R, UK

My usage of cheques has increased since I started buying things through Ebay. I am not at all happy with the idea that the cheque will disappear.
Stephanie Marriott , England

A lot of small businesses (plumbers for example) aren't geared up to accept electronic payment, and some bigger establishments such as solicitors still want payment by cheque.
Chris, UK

I am not given the choice of giving up cheque use - Alliance and Leicester are arrogantly imposing a debit card. Cheques are much better because the spending is recorded in the book making tracking easier as it's not likely to get lost like card counterfoils.
Terry Webb, England

When children need to take money to school to pay for trips, photographs, lunches, etc. a cheque is by far the safest way.
G Hewitson, Wales

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