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Cheques ‘not in terminal decline’

Cheques should stay and not be killed off, MPs demanded today.

MPs today hit out against banks over plans to phase out cheques.

The Treasury select committee today cross examined representatives from the Payments Association over plans to kill cheques.

Committee chairman John McFall said: “First of all we are not convinced cheques are in terminal decline.”

He explained cheques remain the second most common form of payment.

“It doesn’t seem like a very democratic approach,” he said. “This looks like you are forcing the market.”

Mr McFall also hit out at the industry figures over the costs of cheques and the benefits of ditching them, claiming it did not include the costs in place for customers.

The Payments Association, which represents banks and other industry groups, is planning to ensure that by 2018 there is no scenario where customers, individuals or businesses, still need to use a cheque.

The MPs also heard from charities Help the Aged and Age Concern which called for cheques to stay for the sake of pensioners and those who struggle with phone or online payments.

Jane Vass, Age Concern and Help the Aged finance expert, said the demise of cheques “would encourage people to return to cash. There are concerns about large amounts of money kept at home.”

She added older people would be forced to depend on others. In one case a woman was told she couldn’t pay for her insurance renewal by cheque but was unable to read her card number.

Smaller charities are also heavily dependent on cheques for donations.

The charities called for alternatives to cheques to be clear before they are phased out.

Small business representatives also complained that the switch to online payments was moving the cost of processing payments by cheques from the banks to businesses.