Businesses will need to prepare for a world without cheques -
but that could actually make them more efficient, according to
Birmingham accountant Henry Briggs.
His comments follow the confirmation of the closure of the
Cheque Guarantee Card Scheme at the end of June.
Mr Briggs, senior partner at the Birmingham office of Haines
Watts, said that with the Cheque Guarantee Card Scheme having been
in terminal decline for the past three years, it would not be too
long before cheques themselves followed.
"Cheques will soon go the way of farthings and ten bob notes.
They were once the main non-cash method of payment and when the
cheque guarantee scheme started some 40 years ago, the initial
limit was just £30. Today there are three limits up to
£250 but all that will come to an end on June 30th," he said.
"The use of cheque guarantees has been declining rapidly in
recent years. Last year, only 7% were guaranteed representing a
fall of 70% in the number of guaranteed cheques over the past five
years. Many retail outlets - especially petrol stations and
supermarkets - don't take cheques at all," said Mr Briggs.
According to the Payments Council cheque usage dropped by
£21.5bn in 2010, down 10% compared to 2009.
"The closure of the guarantee scheme is likely to have a big
impact on those businesses that do not take credit cards, possibly
to avoid charges, or impose a minimum spend for credit cards.
"Businesses are going to need to think differently about how
they make and receive payments. Electronic transfers are
increasingly common but may represent an increased exposure if BACS
transfers and passwords are in the hands of a single authorised
signatory."
A consultation with local small and medium-sized businesses has
been launched by British Chambers of Commerce and the Payments
Council specifically to discuss a target date to replace cheques by
2018.
"My reckoning is that signing a cheque will be a thing of the
past within the next decade. We'll also be saying goodbye to that
old excuse of 'the cheque is in the post'," said Mr Briggs.
For more information on Haines Watts, please visit their website
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