The death knell for cheque payments – the staple of many freelance businesses – was first sounded to the din of consumers ripping up their cheque books in early 2007.
Now, the momentum behind the phasing out of the paper payment order has accelerated, given that many firms say that they too plan to ditch their cheque books.
In fact, one third of businesses will stop paying by cheque within the year, and one in nine will no longer accept them as a valid form payment in the next 12 months.
The findings, from Creditsafe, were greeted with some surprise for indicating that firms are being fussy about payment at a time when getting paid at all is still a concern.
But the group said ‘payees’ dislike cheques being used to delay payment, either arising from the transaction time involved or because the date or signature is purposefully left blank.
Cheques also require the physical act of the payee having to visit their bank to complete the transaction, and lack the traceability of BACS payments, which offer real-time tracking.
For public-facing businesses, the cheque is increasingly seen as an unwanted restriction to customer flow, as the need to fill them in can cause build-up at checkouts.
Marks & Spencer made the argument when its stores consigned the cheque to history in March last year, mirroring decisions made by Asda, Boots, WHSmith, Shell and Morrisons
David Knowles, Creditsafe’s sales marketing director, said: “We could be witnessing the beginning of the end for cheque payments.
“They are viewed by many businesses as inefficient, time consuming and a security risk compared to BACs transfers and card payments. Increasingly businesses want traceable, efficient payment systems that do not need to be physically processed.”
However some businesses will maintain that cheques afford them greater security and control over the payment process, particularly compared with online transactions which can be completed, sometimes in error, within a few clicks of a computer mouse.
Editorial image courtesy of CarbonNYC
Jul 21, 2009
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