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

[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

[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

[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

[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.

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?

[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?

[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?

[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.

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

[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

[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.

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

[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.)

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.

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?

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

[Idiomatick]

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

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.

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.