UKPC signs cheque death warrant

The UK Payment Council, the body responsible for setting out the British national payment strategy, has confirmed a target to end central cheque clearing by October 2018.

The use of cheques has decreased substantially since 1990, when 11 million were written every day.  In the last five years alone, there’s been a 40% reduction in the number of cheques, with just 3.8 million written per day. According to a UK Payment Council report, a reduction in volume of 12% was recorded between September 2008 and 2009 alone.

Despite this week’s decision, the October 2018 deadline can still be overturned.  A final ruling on the closure of central cheque clearing will be made in 2016, but “only if acceptable alternatives to cheques are available to users for all of the significant areas where cheques are still being used.”

The UK Payment Council has worked closely with SMEs and enterprise (including financial institutions and the public sector) before coming to the decision.  The report confirmed many large bodies, including the public sector, have already reduced cheque usage – and claimed that for some, “the cheque clearing could be closed tomorrow with little or no impact upon their business.”

Chief Executive of the Payments Council, Paul Smee said: “This announcement marks the start of extensive work that we need to do to ensure that everyone has a viable alternative, should the cheque clearing close. We aim to be very transparent and we will continue to consult fully with all interested parties.”

He added: “There are many more efficient ways of making payments than by paper in the 21st century, and the time is ripe for the economy as a whole to reap the benefits of its replacement.”