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

[MakinBacon]

As a former cashier who worked at a nationwide chain, I believe that the death of the check will be welcomed by those at all levels of retail. I have been involved in many horror stories caused by my registers check scanner accidentally tearing the check in half. Also, I had the awkward duty of explaining to people that their checks are no good and cannot be accepted without being able to tell them why (when the cashier scans your check, the register automatically does a background check).

Re:Good Riddance

[MakinBacon]

Actually, I had to inform them of their credit cards being denied, too, but that wasn't as awkward (for me, at least) because technically their bank was rejecting the card, not my store.

Re:Good Riddance

[Richard_at_work]

In the UK, when you used a cheque in retail it has to be accompanied by a cheque guarantee card, which the retailer will copy details from - your bank basically gives you a card (usually its combined with your debit or cash withdrawl card, I've never seen a standalone cheque guarantee card) which tells the retailer how much the bank will guarantee to pay in *any* event when they take your cheque, which circumvents people drawing cheques on empty accounts. No cheque guarantee card, no cheque accepted, simple.

That said, pretty much all of the UK retail base phased payment by cheque out in 2008/2009, so its pretty hard to find a place that will accept one these days anyway.

Re:Good Riddance

[McHenry Boatride]

Cheques aren't just used in retail. Many small businesses - builders, central heating engineers, and others of that ilk - accept, and prefer, payment by cheque or by cash. They don't want the extra expense of accepting credit cards, and not all customers have access to electronic funds transfer.

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.

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

[Anonymous Coward]

That's a great idea! Add some OCR indicators with the account nunbers and a place where the amount can be written out in longhand notation, and we'll be ridden of checks in no time!

Re:Good Riddance

[Wowsers]

I would rather see the end of cards, what with people who can't even remember an insecure and hopelessly short 4 digit pin, or paying for a newspaper - on a card, or the communications breakdown between cashier terminal and the bank. These people all drastically slow down the "10 items" lines in a store, there should be cash tills only.

Now credit and debit cards are coming out with contactless technology, so it will be even easier to steal money from your bank account, all without your knowledge, and as it's a small payment, the bank will do noting about the fraud.

Re:Good Riddance

[AliasMarlowe]

not all customers have access to electronic funds transfer.

That's your problem, right there. Fix it.
The capability for electronic funds transfer should be automatically granted with any bank account - both via debit card and via internet. In the Nordic countries, cheques are essentially extinct. If you try to present one at a bank, it is treated as a truly exotic item, and may cause confusion. The only cheques deposited are invariably from countries with backward retail banking (UK, US, Canada, etc.), and the clearing time and fees can be significant. On the other hand, electronic transfer to or from other accounts (worldwide) is fast and cheap, and provides immediate confirmation of receipt of the payment.
I regularly pay vendors in Germany, Sweden, and Finland with direct electronic transfers via internet when making purchases or handling invoices. There is no risk of "delayed/lost in the mail" as happens to cheques with remarkable frequency. On-the-spot payments (small stores and large, petrol stations, vending machines, parking meters, etc.) are made using the debit card for the account. There is no need to carry wads of cash in your wallet, and shops do not have to handle or transport large amounts of cash.

Re:Good Riddance

[Sobrique]

Outside of franchise America - AND the rest of the modern world. Because you don't have that problem in Europe - EFT is well supported and widely available, and it's actively trivial to pay by card.
Bank to bank transfers are also widely available and free of charge.
If you think about it, you'll see why this makes sense - cheques require manual validation, direct transfers don't. Cheques require physical items moving around, direct transfers don't.
I'm afraid it really is only backwaters that hasn't kept up with the times. This might include a lot of the US though I guess...

Re:Good Riddance

[im_thatoneguy]

Cards slow down express lanes? You're kidding right?

I swipe my card while the checker is scanning. When he's done it prompts me to confirm the price. I hit yes. He prints a receipt. No change. No counting. Instantaneous.

Re:Good Riddance

[iamacat]

Not every business is a nationwide chain. Any two people can use a cheque for a transaction without paying a transaction fee or going through inconvenience of setting up a credit card processing service. If I have personal means to verify your trustworthiness I may accept your check regardless of your eligibility to get a credit card. And a pen works just fine when there is no possibility of a network connection to process a card. Just because something works for Wall mart doesn't mean that a street cornet vendor or a one-off private seller should be denied additional options.

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

[ommerson]

You are labouring under the assumption that cheques are a cheap form of payment for small businesses. They are not, and as volume of cheques in use reduces, it is likely to become increasingly less competitive. I'd hazard a guess that payment by debit card is already a much cheaper way of doing business, and one in which payment is guaranteed (unlike cheques, which might bounce).

The future is almost certain to be mobile card payment terminals of the kind used in restaurants, with a GPRS/3G data connection to the merchant. These are already in common use amongst tradespeople.

If you consider that almost everybody trusted by a UK bank with a cheque book is also issued with a cheque guarantee card - which in almost all cases is some kind of debit card - it's hard to claim that this method of payment is any less available.

However, there are some definite accessibility issues to be addressed for disabled users, but cheques suffered from a different set of these.

Re:Good Riddance

[thetoadwarrior]

We have one and it's cash. We don't need a second one that is unnecessarily expensive.

Re:Good Riddance

[ggeens]

With a postal order.

And when was the last time anyone under the age of 90 actually used one of those ?

Do they even still exist ?

Postal orders still exist, AFAIK. Don't remember when I last used one. The only reason to use those is to make an international payment to someone who doesn't accept credit card or money transfers. (Those people are extremely rare.)

I shudder to think how the coversation would go for anything more

The post office makes you fill out the form completely (writing down the same information 3 or 4 times, including the amount in text). Then, they take your money and give you one part of the form.

Re:Good Riddance

[QuestorTapes]

>> not all customers have access to electronic funds transfer.

> That's your problem, right there. Fix it.

It's a problem, but not the only problem in the US.

> The capability for electronic funds transfer should be automatically granted with any bank
> account - both via debit card and via internet. In the Nordic countries, cheques are
> essentially extinct.

Most other nations have different financial protections on EFTs than here in the US.

One root cause of this is that the banking system in the US grew from state-chartered banks, not federally-chartered banks. 50 states, all with different rules and regulations.

Much of the current legal and technological infrastructure to begin to _consider_ phasing out checks in the US was only put into place post-911. At that time, the federal government was confronted with the fact that they had been nursemaiding a check clearing system leftover from the early 20th century, and even a brief interruption of airline service significantly impeded the ability to move huge boxes of paper checks across long distances quickly.

The legal overview still isn't as good as it needs to be. People in the US are still advised by security and financial planners to use _credit_ not _debit_ cards, because the protections against errors and fraud are "bank policy" which can change in an instant, not "the law".

Correcting an issue with bank errors in clearing a check required banks to put the funds back in place and follow a real procedure for resolving the issue quickly.

With EFTs/Debit cards, banks are typically _very_ slow to restore the funds, and often glacially slow (and incompetent) at resolving the issues.

Personal experience: I've set up EFTs for recurring bills at various times in the past. In each case, the bank was unable to complete some transfers, unable to cancel the transfer, unable to resolve the issue quickly, and I was charged for late payments. Some of these took several _months_ to resolve.

> The only cheques deposited are invariably from countries with backward retail banking (UK, US, Canada, etc.)

As noted by another poster, it isn't all retail. In fact, it likely isn't even _mostly_ retail that deals with checks. Small service industries: appliance repair, contracting/home remodeling, charities and non-profits, small-business suppliers and wholesalers, shippers and transport firms, any companies dealing with Asian, South American, or former Soviet-block nations need to deal in checks all day, every day. Or lose the bulk of the business they do.

> electronic transfer to or from other accounts (worldwide) is fast and cheap,
> and provides immediate confirmation of receipt of the payment.

Not in the US, and the banks are shielded from the need to confirm _by law_. I'm also curious about the claim that it's fast and cheap (reliable implied) worldwide. I mentioned several regions above where checks are still common. I have no doubt that fast, cheap and reliable EFTs are available in all those regions. But are they reliable to all businesses in those areas? Sure, if you are dealing with a big Asian electronics, metals or chemicals supplier, I'm sure it's no problem. What about the small-lot specialty suppliers; do they have the same fast EFT access, with reliable transfers protected by law? I'm not so sure.

> There is no risk of "delayed/lost in the mail" as happens to cheques with remarkable
frequency.

Not in the US, where delayed/misdirected, effectively "lost" EFTs are commonplace.

> On-the-spot payments (small stores and large, petrol stations, vending machines,
> parking meters, etc.) are made using the debit card for the account.

Mostly true in the US; some things (parking meters) are not usually equipped for debit cards. In part, this is due to the fact that there are more parking meters in some major US cities than there are _people_ in some of the Nordic countries you mentioned. Since ownership and management of t

Re:Good Riddance

[OolimPhon]

Good luck buying a house with that cash. The drugs squad would like to have a word with you...

Re:Good Riddance

[thetoadwarrior]

Yet people are fine with the fact that paying with legal tender should result in the authorities investigating you? Sad really.

Of course you can do what many people do any just transfer the money from your bank to theirs. Which is all a cheque is but much faster.

Re:Good Riddance

[FuckingNickName]

Tomorrow belongs to you, eh comrade?

1. If you shop in small, independent stores, you may be doing a favour by giving exact change.

2. Either way, you are certainly doing a favour by paying in cash: no transaction fee.

3. Lines are usually slowed down where I shop by gossip, which involves extra minutes rather than seconds. This is dependent largely on whether shopkeep and customer know each other. Nattering teens are as guilty as pensioners. To some, this is a social perk of going to a physical store.

4. Most people taught before the calculator generation can estimate the cost of their purchases and, when quoted the exact figure, sum up a few coins in seconds. This tends to exclude those in their teens and 20s, unless they have made a willing effort of their own to master mental arithmetic. This disparty becomes painfully obvious whenever some electronic system fails, or in the event I do not pay by exact change and receive incorrect change.

5. But it turns out that when you get old, your mental and manual dexterity is reduced. You have two choices: stay at home and wither away lest you have to confront an arrogant version of yourself from 50 years ago with all the advantages of health that youth enjoys, or rage against the dying of the light and try your best. Meanwhile, while I am young, I shall appreciate those who have endured more than twice as many years and hardships as me yet carry on. I'm quite sure there is no emergency requiring me to get my purchases home within five minutes rather than ten, and I can use the time to think, to listen (to those around me or to a recorded book), or to chat.

If you still abhor the environment of a physical store, they have the Internet for shopping now.

Re:Good Riddance

[TheRaven64]

ATMs do charge access fees (yes not at the local branch)

Not in the UK, where this story is relevant. No banks in the UK charge ATM fees for anyone with a bank that is part of the Link network. The only ATMs that charge fees are the private ones that you find in pubs and (occasionally) shops.

Re:Good Riddance

[u38cg]

In the UK, the card transaction can't start until the physical transaction is complete, and require a PIN and two-way authentication. Some tills even lock up when you put your card in too early.

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:Good Riddance

[2obvious4u]

I'm sorry there are still people in the world, and even the UK who don't have internet. Elderly in nursing homes come to mind.

What about large purchases? I use my debit card for all small transactions, however when I paid the HVAC contractor I wrote a check. When I bought my car, I wrote a check. When I bought my house I wrote a check. For everything else I use electronic transaction, but there are lots of cases that a check is the best/only option.

Re:Good Riddance

[CodeBuster]

As an American living in the United States I would just like to amplify what the parent is saying about the legal frameworks surrounding checks and credit cards. In the United States the banks are well known for dragging their feet on issues that the courts and regulators have not forced them to address. There are clear legal procedures and consumer protections in place for checks and credit cards, but the state of affairs with debit cards and electronic transfers is much more tenuous and is often a matter of "bank policy" rather than firmly settled law. The problem in the United States is not technical, but rather legal and regulatory. Until banks are forced by law to offer the same protections to debit and electronic funds transfers as they do to checks and credit cards (with similar consumer protections against botched transactions of missing funds), many people will remain reluctant to use the later methods of payment for large or important transactions.

Re:Good Riddance

[cffrost]

[...] OCR [...]

Actually MICR.

How do people pay eachother?

[Anonymous Coward]

If I wanted to buy a car from somebody, how would I do it? Right now the only reasonable options are PayPal, check, cash, or credit card. The only tender an ordinary person would accept for a car are cash and check, and most people wouldn't want to handle enough cash to pay for a car.

dom

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?

[BorgDrone]

> If I wanted to buy a car from somebody, how would I do it?

Transfer money from your bank account directly to theirs ?

Re:How do people pay eachother?

[abigor]

Bank transfers, Mr. Conspiracy Theorist. Cheques have been obsolete in much of Europe for years, yet there's no crushing dictatorship preventing people from giving money to one another.

Re:How do people pay eachother?

[IntlHarvester]

In my experience, people generally will not accept a personal check for an automobile. Cashier Check or Money Order.

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:How do people pay eachother?

[Richard_at_work]

You get a Bank Draft, which is accepted as cash at any bank but for the purposes of the transaction is the same as a cheque - just a convenient single bit of paper. In the UK this is the main alternative to paying for a vehicle by financing - quite a few dealerships will not take several thousand in cash.

Re:How do people pay eachother?

[justleavealonemmmkay]

why should an electronic transaction be more expensive than a pen-and-paper order to a bank clerk to perform te exact same electronic transaction?

Re:How do people pay eachother?

[Valdrax]

There are usually some unreasonably high fees associated with bank transfers like that. Checks are virtually free. Should it cost $20-$30 to make every transaction in the future when you could have wrote a check for free?

There aren't such high fees in countries where that's the normal way to do business. Heck, you can do it for free in the US between many credit unions, including credit unions on other sides of the country. I've borrowed and repaid money to my family that way.

A check is nothing more than a bank transfer form with your account and other info written down on it. The only reason bank transfers cost money in the US is because they can. (Should you at this point have any surprise left at the fact that 90% of bank fess are set up to screw you instead of cover costs?)

Re:How do people pay eachother?

[rve]

Bank transfers, Mr. Conspiracy Theorist. Cheques have been obsolete in much of Europe for years, yet there's no crushing dictatorship preventing people from giving money to one another.

Continental Europe here. Haven't used checks since the 80's, I didn't know they still existed. You used to put a bank transfer order in your bank's mailbox or mail it to them, but even that is something I haven't done this century, as it's so much more convenient to just enter a bank transfer order on your online banking web site.

Re:How do people pay eachother?

[bbtom]

That's exactly the right point. The Payments Council don't seem to have really thought out person-to-person transfers or small business transfers. If someone wants to pay me money using a cheque, all they need to know is my name (or the registered trading name of a business etc.). With a bank transfer, you need to know the bank account details of the person - and nobody is quite sure as to how public bank account numbers ought to be. Cheque still rules for getting paid expenses too. I've done the PayPal thing, which is cool - except PayPal take a slice of the transaction. I've done the online banking stuff and it's painful - crappy websites, no notification (how about an e-mail from my bank every time a transaction goes through my account? GPG exists, goddamnit - use it!), security designed for the sort of people who set their passwords to "password1" and tell all their idiotic friends their MySpace password and then wonder why they get "hacked". If you think writing a cheque is inconvenient, how about carrying a laptop and 3G dongle around with you in order to do bank transfers on the website instead?

Yeah, in shops, use a damn debit card. But for person-to-person transactions, cheques are pretty convenient. The security sucks, admittedly - a shared, public key that anyone can copy is not really security at all (a bit like credit cards: credit card fraud, at least until a few years ago, consisted of writing down the number and details that was given out to the merchant upon every purchase - that's real secure). But with cheques, you can post them - slip 'em inside birthday cards. You can give them to third parties (children, employees etc.) who can hand them to their eventual target. You can use them even where there isn't an Internet connection - and, well, outside of the big cities, there's plenty of rural countryside with no 3G service. You can post-date them, and the recipient can return them - my old school used to do this with their after-hours activity programmes - you'd give them half in a current-dated cheque and the other half in a post-dated cheque, so if you don't decide to finish the activity, they just return the second half of the payment.

The only problem with cheques is that I have to walk to the bank to pay them in and it costs the banks money to process them. The walk is quite good exercise, and since the banks got £300 billion of taxpayers money last year under the Special Liquidity Scheme, and they pay themselves HUGE FUCKING BONUSES, I figure the odd 25p here or there to process my damn cheques is pretty reasonable. Not to mention the huge amounts they've had in fees and fines - fines they've charged me due to the ineptitude of other banks (who have web security models designed for the aforementioned idiots). Not to mention interest they make off the money we keep in them. They seem to want to have it both ways: they argue that cheques cost a lot to process AND nobody is using them. But if nobody is using them, surely the number of people you need to employ processing cheques is pretty minimal.

While I'm ranting about banks, here's another thing: it's only in the last year that UK banks have actually got their shit together to be able to move money between accounts and it take less than four fucking days. A family member moves the housekeeping money from one account to another every month. He does this by going to one bank, drawing out however much it is (a few hundred pounds), walking down the street to the other bank and paying it in. Every time, the helpful bank assistant seems to suggest that he could do this electronically. The difference is, if you pay in cash, it is immediately available - while a BACS transer takes 3-5 days. They've only recently changed this so that it takes at most a few hours. But Christ-on-a-fucking-wheel, why did it take until 2009 to be able to move money instantly from one account to another? And it's still only certain banks that do the same-day transfers. These guys are absolutely retarded. With the billions they make every second, you'd think they'd be able to install a few broadband lines between their offices and make it so money can get transferred quickly. Three days - seriously?!

'Too big to fail' presumes the banks aren't the epitome of fail to start with.

Re:How do people pay eachother?

[W2k]

In what country are high fees associated with bank transfers? Where I live (Sweden), going to my bank's on-line service I can transfer money to any other bank account at no charge whatsoever.

Re:How do people pay eachother?

[IntlHarvester]

Just checked and my non-insolvent major US bank limits electronic transfers to random people's accounts to $2000. Which wouldn't even be enough to cover rent for many people, much less an car.

Re:How do people pay eachother?

[Weirsbaski]

> If I wanted to buy a car from somebody, how would I do it?

Transfer money from your bank account directly to theirs ?

Taking it one step further, we could have a piece of paper that says how much to transfer, signed by the transferer to make it legal. Then there'd even be a paper trail that could be checked if there were any problems!

Not sure what to call something like that, maybe "instant signed bank-to-bank transfer guarantee on paper receipt" (or "isbtobtgopr" for short)?

Re:How do people pay eachother?

[jimicus]

I have never been charged for a bank transfer in the UK - and its a regular occurance between my group of friends, to pay for weekends away et all. Perhaps we are spoiled in the UK, I've heard too many horror stories and oddities about the US system, you guys just don't seem to have personal accounts setup as nicely as we do here.

A number of people are taking banks to court over bank charges, claiming they're unfair. If they ultimately get their way (a recent court defeat isn't the end of the matter), the banks aren't going to accept the loss of their biggest cash cow overnight. They'll come up with something else.

Expect to wind up paying a monthly fee for the "privilege" of having an account. Don't be too surprised to see per-transaction fees too.

(Just to clarify for our American cousins): Personal bank accounts in the UK usually accrue zero charges for daily use (taking out and paying in money, transfers between banks etc).

Where you do pay is if you exceed your overdraft limit by even one penny (something which is very easy to do when the bank automatically gives everyone a debit card, encourages them to use it and most businesses accept them without further charge). Do that and the bank will charge you for being over your overdraft limit, they'll write you a letter and charge you for writing that letter, they'll slap on another charge for every couple of weeks you're over the limit and they'll charge swingeing interest on the overdraft (including their charges). Each of these charges can be up to £25-30.

Do the same thing next month and you get charged again.

Re:How do people pay eachother?

[Hognoxious]

With a bank transfer, you need to know the bank account details of the person - and nobody is quite sure as to how public bank account numbers ought to be

They're printed on the bottom of cheques, so if you've ever given a cheque to someone then he knows them.

Not to mention the huge amounts they've had in fees and fines - fines they've charged me due to the ineptitude of other banks (who have web security models designed for the aforementioned idiots).

Does that translate as "I can't remember my password and I keep getting locked out. Also, I'm so poor at managing my cashflow that I'm always overdrawn"?

But Christ-on-a-fucking-wheel, why did it take until 2009 to be able to move money instantly from one account to another? And it's still only certain banks that do the same-day transfers.

That's a fair point but it's nothing to do with absence of broadband lines. It means the bank has a huge rolling float of in-transit money that it can earn interest on while not paying any out.

Re:How do people pay eachother?

[Metatron]

Pay for the what now ? I can logon to my bank online, and given any sort code and account number transfer any sum of money I choose, (that I have available), for free. This is standard across any UK bank I am aware of. Lots of these types of transactions are instant now too, (or certainly very quick), some institutions still drag and you have to wait a day or so, but they are becoming fewer.

A lot of banks also have a great deal of large companies details stored for you, making it equally as easy to pay any bill.

Re:How do people pay eachother?

[bbtom]

Not to mention the huge amounts they've had in fees and fines - fines they've charged me due to the ineptitude of other banks (who have web security models designed for the aforementioned idiots).

Does that translate as "I can't remember my password and I keep getting locked out. Also, I'm so poor at managing my cashflow that I'm always overdrawn"?

You want to know what it actually is? A bank I used to use had an online security model which required you to answer with both a password and with a 'secret answer'. The 'secret question' was "What's the name of your first school?" - and it was the same for everybody. Ignoring the fact that now so many people are on Facebook and MySpace, that's hardly a useful security measure at all, there is a problem with punctuation. If you went to, oh, St. Paul's Roman Catholic Primary School, that could quite easily be Saint, St., or St, Pauls, Paul's, or Paul, Roman Catholic, Catholic, RC, R.C., Primary, Primary School or many other variants thereof. It turns out the bank was automatically stripping any characters that weren't [a-zA-Z\s] from the secret answer. Which is fine, except they don't tell you that. And you only have to mistype it twice or something and you are locked out. I didn't even mistype it - I have all my bank details in an encrypted text file, so I just copy and paste. If I write out the string, store it in a file, copy and paste it into the field to set it, and then come back a week later and enter it in the same field through copy and paste and it doesn't work, that's quite evidently not my fault.

Once they've locked you out from online banking because of their shitty software, it then takes them two weeks to unlock it. During which time, no transactions allowed. It took until the third time I'd been locked out of this process until they finally explained their byzantine string processing rules. And because it's internet banking, there is no other way of getting any money out. Except one. You can phone them up, and they won't do a BACS transfer for "security reasons" - but if you are willing to pay £25 they'll do a priority transfer. Think about that: you can't have money transferred slowly from your account for security reasons, but if you are willing to pay a fee, those security reasons disappear. I'm sure the fraudster intent on ripping off a savings account will pause in wait, wondering whether or not he wants to spend £25 of someone else's money in order to put a transfer through.

Sadly, stupid excuses about idiotic programmers and their inept handling of strings doesn't cut much ice with people one owes money to.

Of course, once it had cost me my second or third £12 bank fine, I took my business elsewhere. And, no, I generally manage my money pretty well - my student loan is about a third of the size of a lot of my friends, I clear my credit card every month, my laptop is pretty much my only luxury - bla bla bla.

My point was very simple: if you go a pound overdrawn and the bank then wham you with a £12 charge for it, the least they can do in return is to process some damn cheques without whining about how much it costs.

Re:How do people pay eachother?

[dargaud]

I'm also in Europe and seldom use checks, but there are still many instances when you need them. Go to a store and buy something relatively expensive: a kitchen, a load of wood, a 2nd hand car... You can't use a credit card without maxing it. Granted, above a certain value you need to arrange for bank transfers.

Re:How do people pay eachother?

[TheEvilOverlord]

I think this is part of the confusion really. The banking systems in different countries are quite different and have different charging models. They are just trying to get rid of what is a free service in the UK for personal accounts. I know a few small business owners that use personal accounts for their banking precisely because they don't charge for transactions.

I have to wonder what UK bank the GP is using as I have accounts with three major banks and they all charge around £25 to transfer money between them. I've found the easiest way to change money between accounts is to drive to the bank, withdraw in cash and walk across the street and pay it into the other bank. (luckily all three banks have branches next to each other) Stupid in the 21st century, but it's the quickest and cheapest way for me to do it.

Re:How do people pay eachother?

[jimicus]

They will for a CHAPS transfer, but a BACS transfer is almost always free. I've never been charged using Lloyds, Abbey or Smile for a BACS transfer.

Re:How do people pay eachother?

[Bert64]

What range do RFID chips have?
And if you were to increase the power, how much range could you get?
What's to stop someone building a portable high power RFID reader, strapping it round their waist and walking around some crowded places like train stations and taking a small amount from anyone who got within range?

Re:How do people pay eachother?

[ggeens]

There are usually some unreasonably high fees associated with bank transfers like that. Checks are virtually free. Should it cost $20-$30 to make every transaction in the future when you could have wrote a check for free?

In (Continental) Europe, this is different. Money transfers are (nearly) free, while banks charge a substantial amount to process a cheque.

Re:How do people pay eachother?

[YeeHaW_Jelte]

In the US, yes. In Europe, no. I'm not completely sure for other countries, but in the Netherlands bank transfers are done at no extra cost, as is money withdrawal from a debit card.

Re:How do people pay eachother?

[Necron69]

I've stumbled into this problem recently myself, when my ex-wife switched bank accounts, and my payroll department suddenly realized it was illegal for me to be auto-depositing my child support to someone else's account (despite the fact that I've been doing it for four years). Since my ex now lives many hours drive away, and refuses to set up a joint account for deposits, this presents a problem.

After some research, I was forced to conclude that even in late 2009, there is no way in the United States to cheaply and electronically send money to someone else without paying a substantial fee, or involving a third party. PayPal is slow and the ex hates it. A wire transfer costs $20 from my bank. I suppose there is always Western Union, but nothing approaches the cheapness of a check and a 44 cent stamp - it just takes most of a week to get from here to there.

Necron69

Re:How do people pay eachother?

[xaxa]

What kind of transfer are you trying to do?

I know that Co-op, Natwest, Halifax, HSBC, Lloyds, Barclay's, Nationwide, Alliance+Leicester and some Belfast bank can all transfer between each other (online) for free, with personal accounts. (BACS, I think they're called.)

(I don't have accounts with all these, but four of them are from flatmates' transferring their rent to me before I transfer it to the landlord (and pay the bills, too) and the rest friends when I owe them money for gig tickets etc.)

Wrong

[hoofie]

It isn't spelt 'checks' it's 'cheques' in the UK - for fucks sake get it right.

Re:Wrong

[XanC]

This is a US site; it isn't spelled "spelt" it's spelled "spelled"!

Re:Wrong

[weeboo0104]

It isn't spelt 'checks' it's 'cheques' in the UK - for fucks sake get it right.

Don't you mean "for fuques sake"?

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.

Re:Wrong

[footnmouth]

Not any more dude, it's changed over here:

mate is now dude (see above)
2 finger salute is now the bird
blimey is now for fucks sake
mate is now mofo
bloody hell is now gor blimey guvnor (ok, it's not all changed :-))

Re:Wrong

[Anonymous Coward]

Surely, though, if this truly is an american site they should have spelt it as 'faze out' or some such.

Re:Wrong

[TheEvilOverlord]

This is a US site;

I always find this a slightly strange assertion, being a user from the UK. Yes the site was started by someone in the US, and a big chunk of the userbase is in the USA, but stories are submitted from a global audience and link to content that is hosted globally.

It's a bit like claiming the whole Internet is american, because well that's where it started, or that the web is british, because a british guy invented it. It's all a bit silly really.

Re:Wrong

[nmg196]

I think that as English people from England, know how to speak and spell English. Please don't correct us with your bastardised American or International <airquote>English</airquote> :)

Re:Wrong

[Better.Safe.Than.Sor]

As a Canadian, I'd like to say, "I'm sorry."

Re:Wrong

[Anonymous Coward]

You didn't read the FAQ, did you?

Slashdot seems to be very U.S.-centric...?

Re:Wrong

[johnw]

Have you ever heard an American freak out when a Brit on /. uses a British colloquialism?

Well, you for one.

I thought they were already gone in EU

[Anonymous Coward]

I hadn't seen a check in Finland for over 10 years. Then I come to US and find out it's the common way to pay bills. And transfers from bank account to another one are difficult or even impossible between two random people.

Re:I thought they were already gone in EU

[addsalt]

And transfers from bank account to another one are difficult or even impossible between two random people.

You should try writing a check - works great.

Re:I thought they were already gone in EU

[eggnoglatte]

Well, except that the recipient of the check has to run to the bank for the deposit instead of just verifying online that the money has arrived. Likewise, I have to hand-write a check for my rent every month, rather than just going online and clicking a button to transfer a pre-registered amount to a pre-determined destination account (or just setting up a completely automatic monthly transfer).

Banking in North America is so far behind Europe, it is not even funny. Quite an adaptation when I moved back to Canada.

Re:I thought they were already gone in EU

[mdm-adph]

Or in the US you could do it through the incredibly backwards way of setting up BillPay (for your rent) with your bank (like I do), at which point your bank will actually mail a paper check each month to your rental office, just so it can eventually find its way back to them and be cashed.

It's ridiculous.

In ong run should just switch to digital cash

[JoshuaZ]

We have cryptographically secure algorithms for anonymous digital cash. These schemes are easy to implement using blind signatures. http://en.wikipedia.org/wiki/Blind_signature. If properly implemented such a system provides far more anonymity than cash, checks, credit cards or debit cards. We really should be working to switch to such a system.

Sounds Hard

[pgn674]

Every month, I pay my landlord (a professor; I'm his only tenant) with a check. I wonder what system would replace that, that would be significantly different from checks, but that my landlord could accept?

Also, what if I run over someone's bicycle, and I want to give him a blank check to pay for it? Or, more realistically, what if I need to pay an individual that I have only just met more money than I have in cash? What system could replace that that would be significantly different from checks?

I guess it could be done, but it might take some creativity.

Re:Sounds Hard

[Thundarr Trollgrim]

> Every month, I pay my landlord (a professor; I'm his only tenant) with a check. I wonder what system would replace that, that would be significantly different from checks, but that my landlord could accept?

A standing order.

> Also, what if I run over someone's bicycle, and I want to give him a blank check to pay for it? Or, more realistically, what if I need to pay an individual that I have only just met more money than I have in cash?

If you're going to give black cheques away to strangers, why not just give them your bank card and PIN?

As for the second situation, I'm sure your dealer can wait a day or two. ;)

Re:Sounds Hard

[MichaelSmith]

Here in Australia direct bank transfers pretty much fill the niche not filled by cash. The other person gives you their bank account details. You use your bank web site to transfer money to the other account.

Re:Sounds Hard

[Jedi Alec]

With your system, can you give people money by only knowing their name, like you can with checks? I have to look up the spelling of my landlord's name every month in the school directory when I write my check (though I could set my bank to snail mail a printed check automatically every month). Do you need to know more than that, like the recipient's bank account number?

No, we can't, or at least not here in the Netherlands. You need a name, the town where the recipient banks and account number to transfer money. However, since most money transfers are the direct result of some sort of contract, it is normal that this information is provided on the correspondence of the other party and contract itself.

And yes, typical way of paying rent (for those who have their finances sorted out anyway) is to input a monthly transfer, often through online banking. Costs that fluctuate like energy bills etc. are usually paid through Direct Debit.

Heck, I'm 31 and I haven't ever used a cheque in my life. Quaint antiquated concept tbh. So United Kingdom banking establishment, welcome to the 1980's!

Re:Sounds Hard

[adolf]

Back in context: This delay seemingly inherent in current implementations of Electronic Funds Transfer, is worse than a paper check...how, exactly?

Sure, with a check you've got a bit of paper (at some point) which states that so-and-so promises to pay $x from the account in the MICR code at the bottom. But once you pass that on to your bank, you're still waiting, and you still don't know if the transaction was valid until the money actually lands in your account some days later.

(Not that I'm arguing against what may be your main point: There should be a much faster means of conducting a transaction between layfolk than exists now.)

god damn yankees

[Anonymous Coward]

we call em cheques

oh and "how do people pay each other?" = in kind

Obligatory

[Himuanam]

I felt a great disturbance in the Force, as if millions of slow-writing middle aged women suddenly cried out in terror.

Re:In ong run should just switch to digital cash

[seifried]

Yeah, because governments that are supported by taxation of financial transactions are going to LOVE anonymous cash.

Gold

[WarJolt]

Gold is about the only thing that's going to be worth anything by 2018. Maybe they should be phasing out cash too.

Re:Gold

[TheTurtlesMoves]

But what can you make out of gold? What can you grow on gold? How do you eat gold? Can i get energy out of gold?

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.

Money spinner

[GumphMaster]

Personal cheques are a purely a cost to the average bank, shuffling paper and checking signatures does not make them scads of cash. They'd dearly love to replace them with credit cards for which they get to charge an annual fee to the card holder, monthly and annual fee plus a percentage commission from the merchant, and any interest accrued by the card holder at the usual inflated rates, and all riding on the back of a process that is essentially automated (reduced staff costs). Even the direct deposit substitute is a good money spinner with limited numbers of "free" transactions per month before fees kick in, and charges for daring to use an ATM. What's not for a bank bean counter to like about this?

Checks and transfers

[otter42]

I lived in France for four years, using checks. Now I live in Luxembourg and use bank transfers. I much prefer bank transfers. It's easier, faster, less prone to fraud, etc...

However, a couple things bank transfers don't do that checks do:

1) Security deposits: recently my fiancée and I reserved a monastery in France. We had to make a deposit of, what is for us, a significant amount of cash. With checks this is easy. He has a check, which is only valid if we don't show up, and we have a year to pull together the money. If he has hard cash, first of we lose access to that cash for a year. Second, if he doesn't deliver the goods, he has the cash, and all we could do about it is sue him!

2) Large amounts between individuals: we're selling our car and aren't quite sure what to do. Obviously cash is a little inconvenient, but a wire transfer happens at a bank or online. So neither of these work as nicely as a check either. Of course, I'm certain there's some way around it, but until an online bank transfer happens immediately, it won't be as nice and secure as a check.

Re:Checks and transfers

[cgenman]

At the risk of overposting in this thread, never accept a normal check for a car. You want a money order or a bank certified check (which really isn't a check at all). Accepting a normal check for a car is just asking for fraud.

Re:Once the cheques and bank notes are gone ...

[Idiomatick]

Erm... cheques go through your bank btw... Only cash is mostly untraceable...

Small Businesses Will Take a Hit

[CaptainOfSpray]

There are lots of small businesses that will be damaged or made unprofitable. When taking low volumes of payments, where a cheque is much more cost-effective than taking cards, for instance the weekends-only kind of bed & breakfast - getting a card terminal costs £400 and just isn't worth it - that £400 represents our profit for an entire summer.

Re:Small Businesses Will Take a Hit

[flurdy]

Nope, small businesses just require people to transfer money directly into their account. Either pre-, before whatever it is, so they can verify it, or post- (invoice) if they can trust them.

Thats how small sports teams, private instructors, charities etc do it over here(Norway).

Since transfers are free and nowadays pretty instant or at worst a few hours delayed this is quick and easy.
And these days people now can transfer money via their mobiles so this is now even easier.

When I first moved to the UK in the 90s I was surprised they still used cheques, and now nearly into 2010s it is quite bizarre. Since the rest of Europe has been fine without cheques for 20+ years I don't really think they need to worry!

WTF is a check?

[cbope]

Checks? We haven't had those in wide use in Finland for at least 15 years. Every bank here and many local shops have secure electronic terminals where you can pay your bills, if you do not want to do it online. I have paid all my bills online for about 10 years now, and never had a single issue. We can also order from many Finnish-based online stores and make transfers directly from personal bank accounts, a direct debit transaction. No credit cards are needed in many cases and the approval takes no longer than a credit card transaction. Direct-debit from your own bank account is also possible in practically any shop using a so-called "bank card". In most cases, the credit cards issued by the local banks are also bank cards. When I ring up a purchase, I just tell the clerk to either charge the purchase to credit or direct-debit from my account. Easy, simple. I absolutely hated paper checks when I was living in the US. Keeping the checkbook balanced (which it never was), etc.

I don't understand this fear of online payment in the US. It seems most people in the US would gladly give out their credit card number over an unsecure landline to an unknown person/company at the other end, but paying bills online using a secure site is just too risky. Get over it and join the 21st century already.

As an American living abroad, it really frustrates me to see how totally awful some systems are in the US, when I have seen the alternatives available elsewhere. Don't get me started on healthcare, or mobile phone providers, or ISPs... or...

Re:WTF is a check?

[artg]

How do you make a payment between individuals ?

You hate our freedom

[iamacat]

You are contradicting yourself. The unique property of cash is that the government doesn't need to know that you bought some communist books in Barnes and Nobles or that you arranged a private business transaction to voluntary introduce a mind-altering substance into your body. They are still free to jail you if you resort to violence as a result of getting stoned or your ideology. Something tells me that Britain's effort to mandate electronic payments is precisely to track thought crime and precrime.

Wireless Credit Card Processing

[Xerfas]

Here in Sweden there are lots of companies who buy products like these http://www.merchantexpress.com/wireless_credit_card_processing.htm which is a wireless credit card machine. As long as you use it in an area where cell phones work, most of these will also work.
It's perfect when you are on an outdoor market, a convention etc. Even our ice cream trucks in Sweden use wireless credit card machines.
Last time I saw a cheque used was more then 15 years ago, mainly because we have used credit/debit cards for so long that we no longer need or want cheques. For instance, cashing in a cheque from USA in a bank here can cost about $70-90 USD no matter what the amount is. So we rather do electronic payments, cash or debit/credit cards.

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.

Translation

[dugeen]

'Only if alternatives are developed' = APACS will come up with some inadequate, fraud-prone solution involving debit cards. They'll claim it's an alternative and use that as an excuse for abolishing cheques. There'll be about 5-10 years of widespread abuse and then the FSA will tighten up the rules. It was the same with Chip & Fraud cards, it'll be the same with contactless debit cards.

UK vs USA vs AUS

[SirKveldulv]

Good! Checks are a pain in the ass, and (imo) an unnecessary hassle for me every time I have to cash one.

Other than the cashflow benefits of not paying things immediately, I honestly can't see what benefit they have over other payment methods.

Time it takes me to get $$$ from a US check: 3-6 weeks.

Time it takes a wire transfer from anywhere else; 1-8 days max.

Cow Cheque

[DrYak]

One was once written on the side of a cow and left at the bank.

Just a linky for the other like me who didn't know about this (fictional) story.

Re:Wikipedia says:

[TheRaven64]

Not sure what the source for those statistics is, but given that India has more people speaking Commonwealth English than the USA has people, I'm very surprised by that chart.

Re:Good riddance! Welcoming a cheque-free world

[LordKronos]

For a particular store? What if I don't know where they'll want to spend it?
A preloaded credit card that they can spend anywhere? Yeah, sorry but they generally charge a fee to purchase one. There's also the fact that they CAN'T be spent anywhere...still plenty of places that don't take credit/debit. And what if they choose to save the money for a downpayment on a house or something? A gift card isn't much use there either.

Re:In ong run should just switch to digital cash

[Blue Stone]

>We have cryptographically secure algorithms for anonymous digital cash. [...] We really should be working to switch to such a system.

Never going to happen.

The government - any technologically advanced 'Western' government, but specifically the British - will never accept anonymous over monitored; tracked; recorded or vetted *anything* where there is the option of doing one or the other or both.

Information is power - and they like their power over the serfs too much.