Cheques 'extinct by 2025' says Halifax

Paper cheques could become extinct in Britain within the next twenty years as consumers opt for more convenient forms of payment, a new study reveals.

The rising popularity of e-payments, debit cards and telephone and internet banking could eradicate the cheque, despite it proving to be one of the safest forms of payment for small businesses.

This is the damning verdict of Halifax, the high street lender, whose research shows a decline in paper payments over the last year by 7 per cent.

The steady decline of the cheque, from its peak use in 1990, coincides with an unprecedented increase in the number of debit card transactions, soaring to 3.7bn last year, against 522m 15 years ago.

As a result, the combination of increased debit card use and the slump in cheques, threatens to make the traditional payment obsolete by 2025 if their decline continues unchecked.

Halifax pointed out businesses have led the way in switching to direct credit and other forms of payment for salary and trade issues, citing a decline in cheque usage since 1997.

They added the survival of cheques is even more in question given that 90 per cent of salaried adults are paid via direct debit, while 40 per cent of benefits are wired electronically.

“It is very clear that the cheque is no longer the main payment method,” said Peter Jackson, head of banking at Halifax, whose research shows cheque usage dropped last year for the 10th year running.

“Cash and debit cards are clearly the preferred method of payment in the UK today,” said Jackson, adding that ‘quick and easy’ is the ultimate consumer choice for parting with their cash.

The bank confirmed that debit cards are now the fastest growing form of payment in the UK.



 

16th August 2005

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