Digital age set to end reign of the cheque
CHEQUES are continuing their slow march to extinction, but people have security concerns about their 21st century replacement – online transactions.
Cheques accounted for about 27.6 million payments a month in 2010, according to t he Australian Payments Clearing Association, but that figure is down from 71.1 million in 2000 and 85.2 million in 1995.
Also, the value of monthly cheque payments has now slipped below $ 130 billion, well down on its peak of $549 billion in 1997, the data shows.
PayPal Australia managing director Frerk-Malte Feller says e-commerce is growing from strength to strength and PayPal has had a 25 per cent increase in its online transactions in a year.
‘‘ While the cost and convenience are huge drivers for the uptake in digital payments, our research shows that 40 per cent of consumers consider the ‘ possibility of fraud’ and ‘ providing details online’ as barriers to transacting online.’’
He says the industry needs to continue to develop secure payment solutions across online, social networks and web-enabled mobile devices.
‘‘ The cheque will continue to play a role for Australian consumers and small businesses, rural businesses and elderly Australians,’’ he says.
‘‘ However, innovation in digital payment platforms continues, particularly in the areas of privacy and security.
‘‘ The future will be digital and cheques will be one of the first traditional payment methods to become obsolete.’’
Infochoice. com. au financial services analyst David Lalich says electronic payments will continue to grow strongly at the expense of cheques.
‘‘ Maybe the next generation won’t even know what a cheque is,’’ he says.
‘‘ It’s the older generation holding on to cheques.
‘‘ They . . . will continue to use them because of the perception of security issues around electronic payments.’’
However, in many cases banks will refund any money consumers lose through online fraud, Mr Lalich says.
Some financial institutions use this protective stance as a marketing tool.
‘‘ If anything does happen regarding fraud the bank will take care of it,’’ he says.