Will cheques go extinct?

With bank branches on the decline, will cheques follow suit?

“Cheques to check out by 2025” claimed a ThisIsMoney headline in 2005. The article went on to detail Halifax’s prediction that cheques would disappear within the next 20 years, as more convenient payment methods became more popular.

Well, here we are almost two decades on, and it’s certainly true that cheque use has declined. But they’re not destined for the museum of curiosities just yet. In 2004, a total of 2.1 billion cheques were written. The figure for 2021 was significantly lower, at just 185 million cheques.

So, while cheques aren’t falling out of fashion quite as quickly as predicted at the onset of the tech boom, will they ever disappear from our wallets?

Who still uses cheques?

Even though cheques are declining in use, a good deal of us are still writing them. Research from Pay UK revealed that 44% of current account holders and 78% of businesses write at least one cheque each year. However, three in five consumers and businesses agree that they’re writing fewer cheques than they were three years ago.

You likely won’t be surprised that people over 65 are still the age group most likely to use cheques. But you may not have known that they’re actually the demographic acting as the key driver in falling cheque volume. 51% of over 65’s say they write an occasional cheque, but that’s a significant drop from 72% in 2014. Almost half have stopped using them altogether.

The reasons for this swift decline are the ease of alternative payment methods, and also understanding that many people don’t want to be paid via cheque anymore. The Covid-19 pandemic also accelerated the move away from cheques, as people couldn’t make face-to-face payments, visit bank branches or exchange items easily.

Are cheques a protected form of payment?

If you’re a regular cheque user, you don’t need to panic. The Government has made it clear that it isn’t phasing out cheques, and they remain a valid form of payment. It’s true that at one time, cheques had been scheduled to be phased out by 2018, until MPs forced a change of heart from the industry.

But many businesses and organisations now no longer accept cheques, as they involve too much admin, and instead opt for online banking services. For example, National Savings and Investments (NS&I) tried to abolish paying prizes by cheque in 2020 but had to change its mind after some of the 22m Premium Bond holders refused to give their bank details to receive the prizes.

Banking services have focused their efforts into innovating and improving other payment methods instead. You can now use cheque imaging technology to scan a cheque you receive on your banking app and deposit it into your account. With no need to visit a branch (or, no branch available to visit following so many closures), it can be quicker, easier and just as secure.

But there are those who struggle with online banking, or would much prefer to do their banking in person. With physical bank branches vanishing from our high streets, will ‘traditional bank users’ be abandoned?

The pushback against a fully digitised banking system is going strong, so it will be a while yet until cheques disappear from our lives. After all, when you open a birthday card and a cheque falls out, it’s always a nice feeling – it’s much more personal than an online bank transfer!

Here on your high street

At Howden, we know that for certain things in life, talking face-to-face just makes sense. Insurance can be one of those things. Whether you prefer to sort your insurance over the phone or in branch, we’re here for you.

We have over 200 local branches where you can speak to an insurance expert in-person and get the support you need. We’re also opening even more branches across the UK, so keep your eyes peeled!

You’ll also be able to speak to our branch experts about our new Money Savings eBook. You see, we’re on a mission to not only help you save money on your insurance, but also on your shopping, energy bills and more! Click here to download your copy for FREE.

Find your local branch here, and stop by or give us a call.

Sources: Financial Times, Gov.UK, ThisIsMoney, Pay UK, Barclays

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