For more than three centuries, cheques have been used as a mode of payment. But since the advent of the internet, experts agreed that it was only a matter of time before cheques would be consigned to history.
Yet here we are in the digital era still writing cheques to pay the bills, send gift money, and avail of our favorite services. The move toward a cashless society doesn’t seem to be happening as fast as expected, with cash and cheques still dominating contactless cards in the UK.
While cheques are no longer used in some countries like the Netherlands, they remain a popular payment option both for personal and business purposes in the UK. Signs that the use of cheques was slowing down emerged in 2007 when it hit its lowest level. It has slowly climbed back up again, and last year, more than 500 million cheques were written by Britons, a number considerably larger compared to European neighbors.
Businesses Rely On Cheques Heavily
Individuals are making the shift slowly toward electronic payments. Nothing proves more convenient than paying for goods and services with a tap of a card, a swipe on the smartphone, or a click of a mouse. For businesses, however, things are drastically different.
In the UK, two-thirds of businesses explained that they continue to use cheques because they would stumble upon problems with their current payment system if they were to implement electronic payments. History tells us that people resist change, even if it comes with an array of benefits for both businesses and end-users.
Speeding up Clearing Times
The trend appears to point toward the widespread use of digital payment options, regardless of how slow the adoption rate is. Customers who decide to use cheques, however, can still do so in the traditional way.
On March 26, 2015, The Small Business Enterprise and Employment Bill were passed. This required banks in the UK to start processing cheques as images through a website or mobile app by October 2017.
Image-based processing results in faster cheque clearing times. This saves all parties involved precious time and provides them with the common ground upon which to complete transactions.
Digital Isn’t For Everyone
Plenty of innovations have been made in the payment technologies industry. These advancements have enabled customers to pay faster while minimizing security issues associated with cash and cheque payments. But not everyone is willing to jump on the trend. Others simply do not have access to technology. People ages 65 and older, in particular, prefer cheque payments—be it because of familiarity, lack of interest in new technology, or perhaps both.
These roadblocks will continue to obstruct the complete adoption of digital payments. It’s safe to say that in the next couple of years, many businesses will still write and accept cheques, viewing them as the most secure form of payment. Their number, however, is likely to diminish. And this will coincide with the decrease in the number of cheques written in the UK, at which point effective alternatives should hopefully be in place.
