Abolition of cheques in 2018 not definite, says Payments Council 5

Finance | Vibeka Mair | 29 Oct 2010

The Payments Council has decided not to push ahead with the abolition of cheques unless charities and other organisations are prepared for it.

The decision to not close cheque clearing services in the UK by October 2018 unless it is convinced adequate payment alternatives are in place by 2016 followed lobbying from the charity sector and criticism from the Treasury Committee.

It has led to a series of meetings with the charity sector about the future of cheques which have included analysis of the use of cheques and research into potential alternatives.

In the meetings, charities have told the Council they want to be sure that the number of donations they receive, especially from older donors, will not be reduced in a world without cheques. Also, very small organisations say they do not currently have the resource to access technology for electronic payments, or the IT skills to use them.

However, the Payments Council has also listed many reasons why charities would gain from a move away from cheques including the fact that cheques taking several days to clear meant it took longer for a charity to access funds; and that cheque donations did not encourage or enable gift aid to be reclaimed.

The Payments Council will release a full summary of its workshop findings and a full report by the end of the year.

Place a comment

Simon O'Leary
Head of Volunteer Fundraising
Cancer Research UK
5 Nov 2010

Great news for charities, small business, sole traders, and sports clubs, and millions of people across the UK. Without cheques our vital network of local fundraising groups would struggle to fundraise. I'm very pleased about this decision. What struck me about this whole debate was the statement that cheques would not be abolished without there being a suitable alternative, offline, simple payment process in place - that sounds like a cheque to me.

[Reply]

Ashley Wilce
23 Mar 2011
Response to [ Simon O'Leary]

Not a major problem because people won;t be able to buy anything in your shops because you keep closing them for nonsense 'health & safety' reasons.

[Reply]

Sir Douglas Morpeth
retired
aged 86--retired
2 Nov 2010

I find it difficult to believe that you would decide to abolish such a commonly popular system of payment as the cheque without, apparently, adequate consultation with the main classes of people who would be affected.

Why can you not allow those who need cheques to continue to use them and allow the banks to 'sell' other methods to their customers, allowing the cheque system to die out gradually as their time arrives or are persuaded to change.

At present you are a very unpopular Quango.

Sir Douglas Morpeth

[Reply]

Jackie Taylor
Head of Supporter Services
Practical Action
2 Nov 2010

Many charities do rely on cheque donations, especially those with an eldery supporter base. our supporters love sending us comments and good wishes with their cheques. it is ridiculous to suggest that cheques are a prohibitor to gift aid being reclaimed, they payment method is irrelevant, it is the gift aid declaration that is important in gift aid. all charities, small, medium and large should continue to put pressure on the payments council. save our cheques.

[Reply]

Charles Whitehead
Director and Treasurer
Cornwall Blind Association
2 Nov 2010

The banks are using the cheque as a means of noy investing in, and implementing, technology, that exists toda. There is a huge central clearing house where cheques go to be processed. The technology exists for cheques to be input at branch level which could then be routed electroniocally for debit at the payee bank. This is not rocket science, but the cheque is being used as the scapegoat. The banks do not have an asnwer for this argument; when it is put to them they look severly embarrassed and are unable to answer it. Many visually impaired people use cheques as they can't remember long card numbers of pin numbers. Charities rely on cheques for donations. and all charities should fight this vigorously on behalf of themselves and their members.

[Reply]

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