18
The death of checks
It's coming at some point. The checkbook will be tossed onto the dustbin of history, as debit cards and who knows what else take over. The question is -- will the check be allowed to gradually disappear or will it be murdered? British banks want to kill it ASAP.
Next month, Britain's Payment Council is expected to vote to abolish "cheques" by 2018:
...the move was criticised by consumer groups, business lobbyists and charities representing the elderly. They raised fears that vulnerable people, who have relied on their chequebook all their lives, will be left confused.
Many others simply prefer to pay by cheque, instead of by direct debit or bank transfer.
Britain's Federation of Small Businesses is strongly opposed to ending cheques.
The Canadian Payments Association, on the other hand, doesn't feel very strongly about any of it. Spokesman Geoffroi Montpetit says the agency will just sit there and do nothing:
Rather than impose a decision from above, the CPA prefers to allow the venerable cheque to be ultimately overtaken by some new, as yet undeveloped method for moving cash around.
"In the absence of an industry or government edict, we'll just continue to watch (the check's) market share to continue to decline," Montpetit said.
What a decline it's been. In 1990, 87% of all payments were in paper form. Last year, the percentage was 18%. Some form of the check has been around since the first century BC and for 350 years in Britain.
But enough nostaglia. Should the US follow Britain's lead and execute the checkbook?
I vote for at least banning checks in the grocery store checkout line!
Pages
What makes you think the banks will be any less impacted than you if that happens? A checkbook isn't as reliable a paper trail as an account balance receipt from the ATM or a printout of your online account page, assuming you do that before someone hacks the web, and assuming no one's cut the electricity, either. Barring that, there's always your mattress.
The problem with online transactions is how do you prove to someone that they have been paid? There is just no way that can be done. I've asked the bank this several times and they have no answer. With a paper check I can show them a copy of the actual check with their signature on the back.
When the creditor is a bank with a local branch, I can make a payment by check at their window on the last day of the due date even on Saturday and have the payment credited on time. With an online payment with 1 day delivery, the delivery can take 5 days with weekends and 6 days with holidays included.
With a paper check, my favorite local small merchant is paid the full amount of the check. With a debit card payment, they are paid less than the amount of the debit. They have to raise prices to make up for the difference.
Paper checks are not ready for the scrap heap yet.
Oh, and not to be forgotten, with a check, I see the name of the merchant or the check number and clearly know who is paid. The online and debit payment is listed on the statement by the name of the parent company payee or payment processing vendor hired by the payee, and has no visibility as to where the payment was actually made to.
No checks? Sorry, but my 15 year old babysitter doesn't take Paypal or debit cards.
Many merchants don't accept online bill pay.
And what about the collection plate at church? Do we just drop in prepaid VISA cards? A bit ridiculous, don't you think?
18% of transactions is still a very large number. I'm with the Canadians on this one: let checks remain as an option. As a small business (4 employees) it is more cost effective for us to write paper checks out for employees and vendors than the other options. The difficulties of straightening out problems also adds up - it is great when it works, but as soon as there is a glitch, watch out.
I find it too easy to spend too much when I use a debit or credit card. Using cash and checks remains a tactile reminder of how much is in my account.
It's all well and good to use online billpay for utilities, credit cards, etc. But there are a few items that more or less require a check, such as the monthly rent. Sure, I could setup online billpay for my landlord. But since they are not one of my bank's known billers, the bank will just end up mailing them a check anyway (and have to process that check when it is deposited). What would those who want to get rid of checks have me do? Walk into the leasing office with a pile of cash?
Pages
