U.K. Payments Administration Ltd. said it is ending a system that uses credit cards to reduce the risk of fraudulent or bounced checks
The Payments Administration, an industry group, will end the system on June 30, 2011, a representative for the organization said.
Consumers who participate in Britain's "Cheque Guarantee Card Scheme" can use a card to show retailers that the card issuer guarantees payment of the check. Consumers also can write their card numbers on the backs of checks for retailers who prefer the guarantee before accepting checks.
The cards guarantee checks for various amounts up to $400. The average transaction value for U.K. check transactions is $425, the group said.
Two dozen banks and building societies, including Lloyds Banking Group and the Bank of England, take part in the plan by guaranteeing check payments. Less than 7% of the 1.4 billion check transactions in the U.K. last year involved the use of the guarantee cards, the Payments Administration said.
