It was no surprise that a bunch of bankers in the form of the Payments Council recommended phasing out cheques by 2018. It was yet another example of greedy bankers looking to make money at the expense of business owners.
However, it appears that the Treasury Select Committee has taken the side of business and encouraged a new investigation. Apparently, the investigation has been triggered by a flood of complaints from the public, which makes me think that this is a rare victory for “people power”.
Either way, the issues of fraud, consumer choice and the impact on small businesses and charities will be at the centre of this review. According to the banks, abolishing cheques will help stop fraud and discourage people from spending money they don’t have but surely this can happen with credit cards in exactly the same way?
In addition, the scrapping of cheques has increased fraud worries among older people who are unsure about making online payments. Despite the high street turning its back on cheques, there are still so many businesses that rely on them as a form of payment.
Although they are used less frequently (four million in 2009 compared to 11 million in 1990), cheques are still used for several million very important transactions. Of the hundreds of jobs we do a week at Pimlico Plumbers, about 40 per cent are still paid by cheque. Forcing an end to the use of cheques will make it much more expensive for small businesses. And for those businesses already struggling to be part of the long-term private sector recovery, this would be yet another hit to their cash flow.
I also know, from my work with a number of charities, that there are so many organisations whose excellent work is under threat because a large proportion of their donations come from cheques.
Thankfully, the cheque may have had a reprieve with the intervention from the Treasury committee.
Hopefully, the Payments Council will do the right thing, its decision won’t be “lost in the post” and the cheque can again take its rightful place among the respected payment options we operate in this country.