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Cheque guarantee cards are on their way out

Cheque guarantee cards are on their way out

A large number of us still rely on cheques but are you aware that the cheque guarantee card scheme is about to be phased out?

According to research from WorldPay, 42% of UK small businesses and start-ups use cheques for day-to-day payments and 76% of them did not realise that as from June this year the cheque guarantee card scheme will be phased out. In fact talks are under way to phase out cheques completely by 2018, a fact that 45% of small enterprises were unaware of.

62% of businesses have not yet planned how they will make payments when cheques disappear and 29% expect to continue writing cheques for the next few years.

Businesses were asked about the potential advantages of accepting card payments instead of cheques and 61% said transaction times were faster and they would save time and money by not having to manually bank cheques. 32% of business owners said a major motivation to replacing cheque payments with cards was increased safety.

Meanwhile, the Treasury Select Committee is reopening an inquiry into phasing out cheques after MPs claim to have been inundated with letters from members of the general public who routinely use them.

In 1990, around 11 million cheques were written every day. By 2009 that figure had dropped to 4 million. However, many older people are reluctant to use online banking and still write cheques to cover monthly bills.

Age UK says it is unacceptable to scrap cheques without finding a suitable replacement. People who are unable to leave the house rely on cheques as a safe and secure method of settling their liabilities. If that option is taken away, vulnerable older people might have to give their cash card and PIN to other others, which is against all the advice given by banks.

The inquiry will remain open until May 6th and written evidence can be submitted to the Treasury Committee, at 7 Millbank, House of Commons, London SW1P 3JA.

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Image: chair by evanbrennan|photo

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