UK Wants To Phase Out Checks By 2018

The board of the UK Payments Council has set a date to phase out checks in a bid to encourage the advance of other forms of payment. They added, however, that the target of Oct. 2018 would only be realized if adequate alternatives are developed. "The goal is to ensure that by 2018 there is no scenario where customers, individuals or businesses, still need to use a cheque. The board will be especially concerned that the needs of elderly and vulnerable people are met," the Payments Council said in a statement.

Comments

Good Riddance

[Ethanol-fueled]

No more old ladies holding up the line for an hour because they're too technophobic to use a debit card.

I'll shit bricks when they outlaw cash.

Re:Good Riddance

[jimicus]

Some acceptable alternative, that doesn't involve having a computer of a rather insecure mobile phone, will need to be devised before phasing out cheques completely.

Maybe we could write a little note with our bank details on instructing the bank to pay the small business? He could then take it to the bank and get cash - or even just put it straight into his account.

Re:Good Riddance

[iamacat]

What if you don't have an immediate access to electrons. Like say you are in one of the holes in AT&T data coverage that Verizon likes to show on a map? We still need a good old way to arrange offline money transfer between two people.

Re:Good Riddance

[b4upoo]

The alternative can not be automatic bill payment. I just had a situation in which an insurance company took an entire years premium instead of the agreed upon monthly payment. That triggered a cascade of overdraft fees to my account. The company involved did redeposit the money they accidentally took but they failed to pay for the overdraft fees that they directly caused. They will pay eventually but in the mean time I am short of over $100 in expenses generated by their error. Automatic bill payment is not safe enough to use in my opinion.

Re:How do people pay eachother?

[remoford]

I think you have stumbled upon the point.

You can't do a paypal or credit card transaction in person with a stranger without the blessing of someone else (paypal or visa). And if you are using a significant amount of cash, they will presume it is a drug deal or money laundering or something nefarious. Large cash transfers are already defacto illegal in the US (see what happens if you get pulled over and have 50,000 usd in the passenger seat) although I can't speak for the UK.

Governmental and corporate power is maximized when citizens can not do meaningful business amongst themselves.

Re:How do people pay eachother?

[remoford]

That is precisely the point. One man's crime is another man's freedom.

You might not think I should be able to sell my car, on the spot, provided I've got the pinks, to someone who likes it at the drag strip on a whim.

I'll need a phone so I can ask someone else for permission first. To use my own money.

Maybe you think that is nefarious. I think freedom to conduct business ought be a fundamental right.

Re:Wrong

[johnw]

But it's a story about UK banks phasing out something, and the something which they're phasing out is "cheques". When UK banks talk about "checks" they're talking about the precautions they take against money-laundering and the like. I don't think they're going to phase out those any time soon.

There will never be anonymous digital cash.

[Valdrax]

We have cryptographically secure algorithms for anonymous digital cash.

But who wants that? The little people? Hah.

There are only two institutions that could create and support an anonymous cash-free financial system: the government and big financial institutions. Where is a motive for either one that is more juicy than the possibilities of being able to track every monetary transaction you engage in?

Privacy is a tool of the people to evade control by those with too much interest in their day to day lives. No one with power wants to give that to the common man, and if some of us little people got together to try to build a network for handling cash out of the government's and the banks' eyes, it would be tied up in anti-terror laws faster than you can say, "Hawala."

Honestly, cash is something that would not be allowed to be invented today if it didn't already exist and wasn't too hard to get rid of.

Good riddance! Welcoming a cheque-free world

[200_success]

Having lived in Switzerland for a while and experienced the cheque-free banking system there, I can say that cheques suck on so many levels. Handing or mailing someone an IOU in the form of a cheque is stupid when you consider the alternative.

In Switzerland, and I believe in most of Europe, payments are pushed rather than pulled. The receiving party sends the paying party a standard slip with the receiver's account information and amount being billed (or the payer could fill out a blank slip manually). The payer feeds the slip to his own bank's ATM and authorizes the payment. Or, he keys in the information to his bank's e-banking website. Alternatively, they payer can take the slip to any post office and pay with cash. The transaction clears the same day.

Compare that with a cheque-based system:

• The receiver's bank has to demand money from the payer's bank, and typically imposes a hold period on that money.
• The payer doesn't know when the receiver will deposit the cheque; the possible delay makes reconciling accounts a bit messy.
• The receiver doesn't know whether the cheque will bounce -- he's just getting an IOU.
• The payer can easily overdraw his account, through carelessness or maliciousness, and be penalized by both his bank and the receiver.
• The receiver can claim that the payment wasn't received on time, due to mail delays, hold periods, etc.
• The payer can claim that the "cheque is in the mail", when of course it hasn't been sent yet.
• The payer has to worry about whether the receiver has tampered with the cheque (e.g. altering the amount).
• The bank has to authenticate the cheque by verifying the signature, which probably doesn't happen properly in most cases.
• Because the authentication system is basically based on trust, the payer is exposed to massive cheque fraud! Sending a cheque means giving out your account information, which is just as bad as giving out your credit card number. A receiver-pull system is inherently less secure than sender-push. If everyone agrees to do sender-push only, there is no risk involved in revealing your account information.

There are only two advantages of cheques that I can think of:

• Giving someone a casual gift. You can easily write a cheque as a birthday or wedding gift, knowing just the recipient's name. In those situations, it could be socially awkward to ask for the recipient's account information.
• Paying someone who doesn't have a bank account. I understand that many poor people (illegal immigrants?) in the U.S. don't have bank accounts. They end up taking their paychecks to some check-cashing place that charges a hefty fee. This is a rather weak "advantage", since checks are a sub-optimal solution anyway -- possible sane solutions would be to stop hiring illegal immigrants, or let them have bank accounts, or pay them in cash.

In summary, a cheque-based banking system is so completely backwards and broken, it's amazing that such a system could exist in the modern world.