LONDON, (Reuters Life!) – After more than three centuries, the humble cheque is set to become a historic relic after British banks voted to phase it out in favour of more modern payment methods.
The board of the UK Payments Council, the body for setting payment strategy in Britain, agreed yesterday to set a target date of Oct. 31, 2018 for winding up the cheque clearing system. The board is largely made up of Britain’s leading banks.
“There are many more efficient ways of making payments than by paper in the 21st century, and the time is ripe for the economy as a whole to reap the benefits of its replacement,” Paul Smee, the council chief executive, said in a statement.
The use of cheques has fallen drastically in the past 10 years as more consumers transfer money electronically, by direct debit or with debit and credit cards. Last year, around 3.8 million cheques were written every day in Britain, compared to a peak of 10.9 million in 1990, the council said.
It costs about one pound to process every cheque.