Pictured above: Ian Goodwin
It is thought to be around 350 years ago that the first cheque
was ever written. Since that date, cheque usage has risen and
fallen, reaching a peak at £2.4 billion in 1990 and falling
steadily since. Now the fate of the cheque is under review.
The board of the UK Payments Council has set a date of October
2018 to aim for a complete phase-out of the use of cheques. There
is a proviso of course that this can only happen if adequate
alternatives are developed, but the decision has been criticised as
being out of touch with certain sectors of the community.
The board has described the cheque as in 'terminal decline' and
in setting the phase-out date; hope to encourage the advance of
other payment types. However, in consulting with other bodies, it
could well be that the Payments Council receive a surge of support
for this more traditional method of payment.
Although many stores no longer accept cheques, and in spite of
them being the most expensive form of transaction for shops, many
rural businesses rely on this method of payment.
Rural businesses represent a large number of small businesses
where alternative methods of payment have not yet been implemented.
The cost of setting up and working with 'chip and pin' is
often too expensive to be worthwhile, and many rural areas still
have issues with the necessary internet access.
Ian Goodwin, partner and head of agriculture at local law firm
Lanyon Bowdler comments "Many rural businesses cannot afford the
cost of utilising electronic payment methods and, until a viable
replacement is found, cheques are vital to the way those rural
businesses operate".
There are alternatives being proposed, such as 'chips' to be
used with sensors and the use of mobile phones, but these still
fail to address the potential problems with access and signals in
rural areas and also the ability of users - particularly where they
fall into older age groups.
The Treasury Committee is likely to have a hearing in mid June
further to reviewing responses to the proposals, but without
working and affordable alternatives, the phase out of the cheque
could cause big problems for some.
For more information about Lanyon Bowdler, please visit their
website here: www.lblaw.co.uk