New sys­tem to ‘re­place cheques’ in UK

The Pak Banker - - Company& -

LONDON: UK banks are con­sid­er­ing in­tro­duc­ing a new paper-based pay­ment method if cheques are phased out by 2018 as planned.

The UK Pay­ment Coun­cil rec­om­mended last year that cheques be abol­ished but only when a suit­able al­ter­na­tive has been es­tab­lished to re­place them.

The plans have raised con­cerns from char­i­ties, con­sumer groups and the el­derly who say that there is still a con­sid­er­able mi­nor­ity of the pub­lic who rely on cheques and strug­gle with the con­cept of elec­tronic al­ter­na­tives.

Cheques will stay un­til a vi­able al­ter­na­tive has been de­vised by the in­dus­try to serve those who want to con­tinue us­ing a paper-based sys­tem. The Pay­ments Coun­cil has promised that it will not leave con­sumers "high and dry" by rush­ing the changes through. Only 45% of con­sumers are aware of the plans to phase out cheques over the next eight years and of those that do know of the pro­pos­als, a quar­ter think that the tar­get date for abo­li­tion is next year or 2012. The Coun­cil have an­nounced that they will launch and ed­u­ca­tion cam­paign to make the pub­lic aware of the planned changes and when they will be in­tro­duced.

The use of cheques has been in steady de­cline over the last decade but the Coun­cil have stressed that 2018 is only a tar­get date and that the fi­nal de­ci­sion will not be taken un­til 2016 at the ear­li­est. If a vi­able al­ter­na­tive has not been de­vised by this time the date could well be pushed back. John Walker, na­tional chair­man of the Fed­er­a­tion of Small Busi­nesses (FSB), told the BBC: "The FSB is pleased that the banks are look­ing at an al­ter­na­tive pa­per­based sys­tem to re­place the cheque. -PB News

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