Not So Fast With that Check Abolition
Bank Technology News | April, 2011
The United Kingdom’s Treasury is revisiting its plans to abolish paper checks because of what it calls major opposition from the public.
As in the U.S., checks have been on the decline in the U.K. as online payments have grown. That decline led to members of the U.K.’s Payments Council to vote to set a target of 2018 for the abolition of checks. A review was also scheduled for 2016.
But consumer groups, small businesses and charities—which rely more on paper checks than large retailers and businesses—voiced opposition to the move.
The Treasury launched an inquiry based on that opposition and last week said it as unconvinced that checks are in “terminal” decline, and also questioned the claimed economic benefit of ditching paper checks.
There also seems to be a war of sorts brewing between the Treasury and the Payments Council—the Treasury is for evidence of trends in likely check usage over the next ten years, the advantages and disadvantages of abolition and asking the Payments Council on submissions on whether it’s accountable for the impact of its decisions on consumers.
In a statement, Richard North, chair of the Payments Council, said it “welcomed” the chance to update on the plans, and is also working to develop a paper-based alternative to checks.
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