Cheques being phased out in Australia by 2030

[Halcyon]

This was something a few of us were discussing over on the EEVblog IRC channel today.

I learned that the Australian government will be phasing out the use of cheques by no later than 2030. Which to me is still quite late considering the use of cheques in Australia is almost zero today.
Most Australian banks haven't offered cheques for most accounts for some time, however they will still process cheques that are sent to them (at least for now).

In my experience, I've never owned a cheque book and I can count on one hand the number of times I've had to cash a cheque. Same goes for writing cheques, I think I last wrote one in 2002, as the company I worked for at the time still used them.

Keen to hear about other's experiences around the world. Correct me if I'm wrong but the US are still fairly reliant on cheques as a form of payment?

[ataradov]

I've used to write one every month for rent payments, since that was the only thing management were accepting (other than cash in the office). And a few years back they moved to online payment.

The last check I wrote was when I applied for a passport, since that's literally the only form of payment they would accept.

And tax refunds also get mailed as a check, unless you provide a bank account number.

So, the only use of checks for me are government transactions. They can change that any time and I would be glad to stop using them.

[Circlotron]

I wonder what would happen if you got a tax refund cheque for example, from the Reserve Bank of Australia and put it aside and forgot about it for a few decades until they were totally obsolete. Then one day you found it and took it to the bank to deposit it.

[ataradov]

They have expiration date, usually 2-3 months. But in no case they will last more than 6 months.

[Psi]

I've never had a cheque book at all.

I had a deposit book when I opened my account and got a eftpos card in ~1995.  but I never got a cheque book, or wrote a cheque.

[kjpye]

They have expiration date, usually 2-3 months. But in no case they will last more than 6 months.

If I remember correctly, cheques in Australia have to be valid for at least 15 months. This is to allow for people who accidentally put the previous years date on a cheque—fairly common early in the year.

But then I haven't written a cheque in years either—certainly not since before the pandemic.

[ataradov]

Still not going to work with a few decades of wait time. I'm sure they will wait for 15 months to accept the last remaining ones.

[magic]

Keen to hear about other's experiences around the world. Correct me if I'm wrong but the US are still fairly reliant on cheques as a form of payment?

Practically nonexistent, but there are a few banks which will cash foreign cheques if you open an account with them. One even did it for free last time I tried.

US is where I saw cheques for the first time, as an adult

edit
Apparently they are still legally a thing in Poland, but again, I have never in my life heard of anyone actually writing one.

[sleemanj]

Cheques have been completely discontinued here in NZ for a few years now I think, afaik banks won't accept them any longer, and certainly don't issue them.  Probably been at least 12-15 years since I wrote a cheque.

[jfiresto]

... Correct me if I'm wrong but the US are still fairly reliant on cheques as a form of payment?

According to the U.S. Federal Reserve, Atlanta, 3657 million checks were collected in 2021, roughly half business and half consumer, with an average value of $2395. Their number declined 8.3% per year between 2018 and 2021.

[tggzzz]

This was something a few of us were discussing over on the EEVblog IRC channel today.

I learned that the Australian government will be phasing out the use of cheques by no later than 2030. Which to me is still quite late considering the use of cheques in Australia is almost zero today.
Most Australian banks haven't offered cheques for most accounts for some time, however they will still process cheques that are sent to them (at least for now).

In my experience, I've never owned a cheque book and I can count on one hand the number of times I've had to cash a cheque. Same goes for writing cheques, I think I last wrote one in 2002, as the company I worked for at the time still used them.

Keen to hear about other's experiences around the world. Correct me if I'm wrong but the US are still fairly reliant on cheques as a form of payment?

If cheques are becoming unused, then it costs banks very little to keep the processes going. Whereas once they might have to have, say, 1000 staff, now they only need one. The banks make enough money that they should be required to deal with a few "corner cases".

There are use-cases that strongly indicate using a cheque for random one-off payments.

If a recipient doesn't want to give out their bank account details in an email or similar.
If the sender cannot use electronic banking, for any of many reasons.
If the monies are a surprise gift.
Grandparents giving birthday presents are a prime example of the last two.

Such considerations caused UK politicians to not allow banks to cease using cheques. Pressure from constituents is a useful tool.

[magic]

1. Seems related to the utter insecurity of Direct Debit, at least in the US. As far as I understand, anyone who knows your name and account number can simply take your money by swearing that you authorized it

I'm not aware of such fraud happening in Poland (which seems to strongly imply that it is simply impossible ) and people used to routinely exchange bank account numbers with strangers to pay for stuff ordered through auction sites or classifieds. Nowadays most of those websites use various "instant electronic payment" services to streamline the process, so it happens less.

2. Cash can be deposited into any account at the receiving bank's office or any post office here. A transfer can be ordered at the sending bank's office.

3. If you don't know the recipient's account number and don't want to ask you are stuck with cash.

[jfiresto]

1. Seems related to the utter insecurity of Direct Debit, at least in the US. As far as I understand, anyone who knows your name and account number can simply take your money by swearing that you authorized it....

I was told you have to be a trusted payee to pull money out of an account, at least within the ACH system.

I'm not aware of such fraud happening in Poland (which seems to strongly imply that it is simply impossible )....

I can not speak for Poland, but IIRC (I have only done it once in the last 30 years), a payer here, can within five or was it six weeks, simply tell their bank to reverse the debit. That appears to be a sufficient threat to discourage the fraud. The right of time-limited, unconditional reversal was a condition the banks had to agree to to get rid of paper checks.

[jpanhalt]

I still use checks.  They give one a little control over monolithic entities like pubic services with no customer service.  They are also safer than plastic and autopay.  Checks at least have a recognizable signature; whereas, the virtual "signatures" on touch pads are to me unrecognizable. 

As for old checks, yes banks can refuse to take them on deposit after several months as stated.  However it becomes somewhat optional at the short end of that period. (I have never tested the 6-month limit.)  In the past year, a "lost check" arrived, and it was a little past the printed expiration date.  My bank suggested the simplest solution was to deposit it and see whether it cleared.  It did.

Also, an expired check is not lost money.  The debt for which the check was written still exists, at least in the US.

[tom66]

I visited a business recently that only took cash or cheque in the UK.  In the end we agreed to use the bank account numbers printed on the cheque to transfer the money electronically, for some reason that had not been apparent to the owner as a possibility.

[jpanhalt]

I can understand why some businesses would not take plastic.  The fees charge for plastic are high, and profit margins for some businesses are quite low (e.g., 5%).  One local market I go to has a minimum for using plastic for that reason.

[EPAIII]

I still routinely pay my lawn crew with a check. I don't think they can take credit cards or any kind of direct transfer of funds. The only other way would be cash but the government wants to do away with that as well.

Other service providers also want cash or a check - no credit cards. My AC service man. My appliance services. So, what happens from there?

But I can see where more than one government agency may find the idea of having all financial transactions totally traceable would be a good one. But that does not mean that I would.

I am probably too old to ever trust something like bit-coin.

I just had a thought. When a certain political party here finds out that their imported "voters" only want cash, they may change their minds about all this. Of course that won't happen in every country.

[EPAIII]

Just as an aside, my bank now has a cell phone "app" that allows me to deposit checks by taking pictures of the front and back, with my endorsement signature. I get one check every month and deposit it that way with no problems. After depositing them that way, I just mark them "Deposited" and stuff them away. The bank never gets the actual paper check. I guess after a while I can destroy them.

This may be an intermediate step.

[BrianHG]

Still use checks for some private contractors like hiring painters / renovaters / yard work / plumber / temp employees.
I cant see paying them cash as some of them would be receiving upwards of a few thousand dollars.
A check also leaves a traceable paper trail as the receiving bank sends my bank a scan of the deposited check they had to sign the back of.

I wouldn't know how to send large sums of money except for a money transfer which involves going online and dealing with my bank's website having to get everything done right...

I basically have this little book of blank checks.  I write down the recipients name, a dollar amount, and sign.  Then give it or mail it to the recipient.  It's very convenient and doesn't require an online connection.

[AndyBeez]

When did I last write a cheque/check? Let me look...
Whoa 2008.
I still had surfers hair back then

[bdunham7]

Keen to hear about other's experiences around the world. Correct me if I'm wrong but the US are still fairly reliant on cheques as a form of payment?

The US and most people here are not "reliant" on paper checks, but unfortunately they are still widely used.  Less than 10% of my bills need to be paid with a paper check, but unfortunately that isn't just outfits like the landscapers--we have two doctors offices that won't accept anything else.  In addition, a lot of elderly people still write checks and balance their checkbooks manually.

This has led to widespread fraud recently where thieves are intercepting checks in the mail and altering them or using the account numbers.  IMHO, this is 99% the fault of banks for not implementing consumer positive pay.  Mailing paper instruments that have your checking account numbers in plain digits right on the front is a insane risk in a modern world where it is so easy to implement countermeasures.  Even if I use online bill pay, if my payee is not setup for electronic payments the bank mails them a printed check.  One of my banks withdraws the money from my account and sends them a bank check without my account information on it--and I'll be they have positive pay set up on that.  The other two send a printed check that has all of my account info on it anyway.   

 

[DimitriP]

VISA (matercard AMEX and friends) welcome the obsolesence  of any physical form of payment that doesn't involve ...VISA (and friends).
Goldman Sachs doesn't mind that either ( https://www.apple.com/newsroom/2021/08/apple-card-and-goldman-ranked-highest-in-customer-satisfaction-in-jd-power-study/)

2% to 5% of a very large amount is still a very large amount.
With a cheque you can pay without anyone getting the 2% to 5% "hit".

Of course if you are "VISA" or an online payment processor , you want checques over and done with, since you are collecting 2% to %5 on the entire planet's transactions with a realtime digital trail.
(not to mention interest collected on credit cards, because you want those "reward points" don't you ?

As for NZ...it's a liitle larger than the City of Los Angeles
NZ ~ 5M , Los Angeles ~ 3.8M  ( county of Los Angeles is ~9.8 M)
Compared to the planet, it's what in some circles called " a small sample size". 
Apologies to all NZ readers. It's just the numbers

As for AU...."Non-cash payments account for most of the value of payments in the Australian economy. On average, in 2022 non-cash payments worth around $280 billion were made each business day...".
What's 2-5% of $280B with a B ?   (https://www.rba.gov.au/payments-and-infrastructure/payments-system.html)
Yeah!

[ataradov]

You need to look at the number of transactions performed with the checks today, not the total market for payments. This number would be their incentive to kill the checks. If even in the presence of checks today people pay using VISA, this is a clear vote that VISA fees make up for convenience.

For example, when I paid the passport application fees, I'd happily pay 10% more to just be able to pay with the card.

[DavidAlfa]

Cheques looked extremely outdated even 20 years ago when online banking was already a thing.
I only had a cheque once, it was a PITA to cash, my bank wanted a fee because it was issued by a different entity, had to go to the f** end of  the city, get the cash, go back to my bank and deposit it.
To me it's just a messy way to transfer money!

[bdunham7]

2% to 5% of a very large amount is still a very large amount.
With a cheque you can pay without anyone getting the 2% to 5% "hit".

There are many different electronic payment systems that don't go through VISA, MC or the like and have minimal or no fees (to the user in any case).  ACH, Zelle, etc.  Even wire transfers are cheap to free at many banks.