UK May Abolish Check Clearing
Bank Technology News | November, 2009
The trend toward cards and electronic payments has become strong enough that the largest banks in the United Kingdom are scheduled to vote soon on whether to stop clearing checks.
Members of the United Kingdom’s Payments Council, consisting of banks, are scheduled to vote in Dec. 16, with an announcement on the vote scheduled for January. A deadline for the end of check clearing was not announced, but 2018 has been floated by the Council as a possible deadline during past deliberations on the subject.
Paul Smee, chief executive of the Payments Council, said the organizations consulted by the council have said the 2018 deadline would be feasible and could lead to substantial savings for banks.
The council estimates checks cost about one pound ($1.66) to process, or about four times as much as electronic payments. And according to Apacs, only three percent of retail spending in the UK in 2008 was done by check, and the number of checks written has declined by about 66 percent over the past two decades.
In June, the Council set a two-year deadline for the withdrawal of the Cheque Guarantee Card Scheme, which sets the rules for use and acceptance of guaranteed checks and uses a depiction of Shakespeare on participating cards as a common identifier.
A number of large retailers in the UK have already stopped taking checks or are phasing them out.
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