According to Silicon.com
The venerable paper cheque celebrates its 350th birthday next week, although the prospect of the payment method celebrating many more is diminishing.
According to the Cheque and Credit Clearing Company (CCCC), the industry body that manages the cheque clearing system in the UK, the first cheque was made out on 16 February 1659 for £400 by Nicholas van Acker to a Mr Delboe.
When was the last time you wrote a check at the grocery store or clothing store? More likely you used a debit or credit card. Last month I purchased some hand printed cards from an artist on Etsy.com who happened to live in Israel. Did I write her a check? No, I used PayPal. (Now, if only, the post was as efficient. It took almost a month for the cards to arrive in the US.)
The decline in cheque usage is not uniform, according to the report. Older people still prefer to use it, with more than 50 per cent of over 65s in the UK still making spontaneous payments by cheque at least once per month. Women write more cheques than men, with more than 40 per cent making at least one cheque payment in a month.
Yes, I know many banks, especially in the US, deposit and process millions of checks a month, a year. Banks have finally adopted remote deposit automation at the branch and extended it to their business customers. Some are even considering consumer remote deposit automation. If you are a Gartner client, you might want to read our (Rick DeLotto and myself) warnings about this new trend.
And, while I have some affection for checks – I worked for several years in check and remittance processing, the heyday of the check is passing or passed (depending on where you live). They are time consuming – to write, to process. This isn’t news to you, I’m sure. It’s no secret that banks have either maintained or outsourced at least one shift of operations staff to process checks. Yet, the adoption of image-based processing and clearing took years – and in the US was jumpstarted only by Check 21 legislation in 2003.
As checks decline in countries that still use them, some organizations are pushing for a end date for them.
In 2008, the Payments Council published a report tentatively suggesting 2018 as the end date for cheque processing. This has been rejected in favour of determining a date when alternatives to cheque payments are available to those that still rely on them. Subsequently, the Payments Council has decided it will agree on an end date for cheque payments by the end of 2009.
Checks were the PayPal of its time in 1659, no doubt. As banks look forward, look for ways to optimize operations and lower costs, maybe it’s time to stop plans for next year’s birthday party.