Cheques being phased out in Australia by 2030

[tggzzz]

Last time I used a cheque must have been nearly 30 years ago. I recall buying my first logic analyser using a cheque but that was one of the last things I paid with a cheque. Nowadays I use my phone to transfer money to somebody directly and they can see the transaction entering into their bank account near realtime. No risk of a cheque received from somebody getting declined or forgetting you wrote one and run out of money.

Personal electronic transactions here have limits. To pay big amounts like to replace the roof, do the driveway, instal HVAC equipment, build a fence, etc, it is easier to write a single check then spread payments over several days. Also make contractors happy for same reason.

Like somone  said earlier ......   2% to 5% of a "big amount" is still a big amount

My limited understanding is that banks charge the same for handling cash from businesses.

[nctnico]

Last time I used a cheque must have been nearly 30 years ago. I recall buying my first logic analyser using a cheque but that was one of the last things I paid with a cheque. Nowadays I use my phone to transfer money to somebody directly and they can see the transaction entering into their bank account near realtime. No risk of a cheque received from somebody getting declined or forgetting you wrote one and run out of money.

Personal electronic transactions here have limits. To pay big amounts like to replace the roof, do the driveway, instal HVAC equipment, build a fence, etc, it is easier to write a single check then spread payments over several days. Also make contractors happy for same reason.

No. I can raise the limit temporarily and make a single large payment. Same for things like buying a car with a debit card.

[mikeselectricstuff]

Banks would like to save money by phasing out cheques. Use of cheques is diminishing, therefore the costs are diminishing - and that reason for preventing cheque use doesn't hold water.

Of course it does - if usage is low, the cost per cheque increases massively. Equipment, training new staff, keeping old systems going/integrating with new systems, increased printing costs for low quantities and probably lots more.
At some point it's just not worth the hassle.
   

[DimitriP]

There is a reason most businesses these days don't use Telegrams, Telex, or even fax for that matter. How long do you go out of your way to support obsolete methods?

"obsolete" is not obsolete until IT IS obsolete.
unfortunately most of the time, it's used to paint negatively a product or service the current salesman or company can't sell you.
esigning subscription, phone company replacing POTS with VOIP etc 

just wait until "cloud oscilloscopes" show up and the only way to use it would be to sign into your subscription acccount and the oscilloscope salesman will say "stand alone oscilloscopes are "obsolete" "

1995, microsoft guy whose name I wish I knew said "No one is using the comand prompt any more".
Then Microsoft "innovated" with Windows server core, powershell, and the "windows terminal".
Command prompt...not so obsolete.

[DimitriP]

My limited understanding is that banks charge the same for handling cash from businesses.

The problem with this thread is we are dealing with different personalities, from different backgrounds from different countries.

I don't know what fees businesses get chanrged for having a bank account in the use.
But I do know that when I deposit a check for $100 , I do end up with $100 in the account.
When you take a card payment for $100 , you end up with less than $100.

Just ask a business that doesn't take american express, why they don't. They'll tell you

[nctnico]

My limited understanding is that banks charge the same for handling cash from businesses.

The problem with this thread is we are dealing with different personalities, from different backgrounds from different countries.

I don't know what fees businesses get chanrged for having a bank account in the use.
But I do know that when I deposit a check for $100 , I do end up with $100 in the account.
When you take a card payment for $100 , you end up with less than $100.

This is because the bank is not transparant about what they do with your money. How much time does it take for a check to appear in your bank balance? I bet this is a couple of days to maybe even more than a week. Where is your money during that time? Well, the bank is using it to make a quick buck and cover the expenses for doing the transaction.

Over here banks are no longer playing that game. You typically get charged a monthly fee and a cost for every transaction you make (the latter mostly for business bank accounts). Over here banks charge companies for doing cash deposits. So taking electronic payments is cheaper, faster (nobody needs to go to the bank at the end of the day) and safer.

[ataradov]

In the US banks are obligated to make the deposited check balance to be available within 24 hours. They can settle the processing with the issuing bank.

This is the base for a lot of scams that make people deposit bad checks and pay back some sum of their own money. The check bounces after a few weeks, but by that time it is too late.

[tggzzz]

Banks would like to save money by phasing out cheques. Use of cheques is diminishing, therefore the costs are diminishing - and that reason for preventing cheque use doesn't hold water.

Of course it does - if usage is low, the cost per cheque increases massively. Equipment, training new staff, keeping old systems going/integrating with new systems, increased printing costs for low quantities and probably lots more.
At some point it's just not worth the hassle.

Strawman argument: I didn't mention cost per cheque - and neither do the banks (or their enablers, governments).

The argument put forward by banks is in terms of cost.
Since the processes and organisation are mature, non-staffing costs will be fixed - and/or fully depreciated.
If the number of cheques is diminishing, fewer staff are required to support cheques is diminishing, and staffing costs are probably the dominant costs.

Hence, unless worked reasoning and costs are provided, it is reasonable to presume the cost of processing cheques will be diminishing.

[SiliconWizard]

There is a reason most businesses these days don't use Telegrams, Telex, or even fax for that matter. How long do you go out of your way to support obsolete methods?

just wait until "cloud oscilloscopes" show up and the only way to use it would be to sign into your subscription acccount and the oscilloscope salesman will say "stand alone oscilloscopes are "obsolete" "

Don't give them ideas! Oh but I know those ideas are already there...

[tggzzz]

My limited understanding is that banks charge the same for handling cash from businesses.

The problem with this thread is we are dealing with different personalities, from different backgrounds from different countries.

I don't know what fees businesses get chanrged for having a bank account in the use.
But I do know that when I deposit a check for $100 , I do end up with $100 in the account.
When you take a card payment for $100 , you end up with less than $100.

And when a business in the UK hands in £100 cash, they end up with less than £100 in their. 2% less, I've been told by an auction house.

[tggzzz]

My limited understanding is that banks charge the same for handling cash from businesses.

The problem with this thread is we are dealing with different personalities, from different backgrounds from different countries.

I don't know what fees businesses get chanrged for having a bank account in the use.
But I do know that when I deposit a check for $100 , I do end up with $100 in the account.
When you take a card payment for $100 , you end up with less than $100.

This is because the bank is not transparant about what they do with your money. How much time does it take for a check to appear in your bank balance? I bet this is a couple of days to maybe even more than a week. Where is your money during that time? Well, the bank is using it to make a quick buck and cover the expenses for doing the transaction.

Over here banks are no longer playing that game. You typically get charged a monthly fee and a cost for every transaction you make (the latter mostly for business bank accounts). Over here banks charge companies for doing cash deposits. So taking electronic payments is cheaper, faster (nobody needs to go to the bank at the end of the day) and safer.

And then there was the famous $95,093.35 cheque...
https://www.scotsman.com/news/opinion/columnists/patrick-combs-heard-the-one-about-the-cashed-junk-mail-cheque-1613914

[TimFox]

Current law in the US is a bit complicated, depending on the nature of the check (along with cash and other forms of deposit).
See  https://www.govinfo.gov/content/pkg/CFR-2018-title12-vol3/xml/CFR-2018-title12-vol3-part229.xml  for full text.
For lots of typical checks (with exceptions carefully enumerated in that long text), money must be available in the customer's account not later than the "business day after the banking day" when the check or cash is deposited.

[tggzzz]

In the US banks are obligated to make the deposited check balance to be available within 24 hours. They can settle the processing with the issuing bank.

... or not, as with the famous $95,093.35 cheque (q.v.)

[SiliconWizard]

My limited understanding is that banks charge the same for handling cash from businesses.

The problem with this thread is we are dealing with different personalities, from different backgrounds from different countries.

I don't know what fees businesses get chanrged for having a bank account in the use.
But I do know that when I deposit a check for $100 , I do end up with $100 in the account.
When you take a card payment for $100 , you end up with less than $100.

This is because the bank is not transparant about what they do with your money. How much time does it take for a check to appear in your bank balance? I bet this is a couple of days to maybe even more than a week. Where is your money during that time? Well, the bank is using it to make a quick buck and cover the expenses for doing the transaction.

While you can argue some "hidden" fees like that on cheques, it is a rather moot point in times where interest rates have been very low. Sure rates are raising back now (which is another story), but it's a relatively recent trend.
There was absolutely zero quuestion that the actual fees on card payments have been much higher than anything you'd potentially lose from the banks delaying cheques for a few days.

Of course the downside of cheques has been that you took the risk of them bouncing. Even though (at least in some countries), there had been services for a long time where as a professional you could consult whether a given cheque would be honored, past a certain amount. Of course that wasn't a 100% guarantee as the money could have disappeeared from the bank account in the meantime, but that prevented the obvious "scams" from people paying with cheques that would be certain of bouncing.

[nctnico]

Current law in the US is a bit complicated, depending on the nature of the check (along with cash and other forms of deposit).
See  https://www.govinfo.gov/content/pkg/CFR-2018-title12-vol3/xml/CFR-2018-title12-vol3-part229.xml  for full text.
For lots of typical checks (with exceptions carefully enumerated in that long text), money must be available in the customer's account not later than the "business day after the banking day" when the check or cash is deposited.

So basically the banks can do what they like with the money for 24 hours. Imagine how much extra interest free money that is on a balance sheet of a bank with a couple of million customers. There ain't not such thing as a free lunch.

[ataradov]

So basically the banks can do what they like with the money for 24 hours.

I'm not sure they can. Because with this system, the money is not out of the issuing account. If they also consider the money to be available internally on their side, then the same money exists twice and can be invested twice by two separate banks. So, newly deposited check looks more like a credit, not the real money.

And given that it takes weeks to settle the transfer, the money would be doubled that way for a very long time.

[vad]

Checks are still widely used by businesses here in the US, especially for B2B transactions. Organizing AP workflows and controls for check payments is easier than for ACH. Wire transfers are higher risk than checks and are more susceptible to fraud. I know of an incident where fraudsters using social engineering attempted to modify beneficiary details for a wire transfer of an 8-figure sum and were stopped at the last minute thanks to the vigilance of an AP clerk, but they were very close to success. Unlike wire transfers, checks can be canceled at least several days after issuance.

[Halcyon]

Many of the above posters not only do not like or use checks themselves, they want to stop everyone else from using them.

Precisely.

It would be good to hear from those that use cheques, to find their use-cases.

Banks would like to save money by phasing out cheques. Use of cheques is diminishing, therefore the costs are diminishing - and that reason for preventing cheque use doesn't hold water.

Banks should serve their customers, not dictate how the customers have to behave.

I don't think it's just on the Government/banks. Consumer and business habits dictate this.

There is a reason most businesses these days don't use Telegrams, Telex, or even fax for that matter. How long do you go out of your way to support obsolete methods?

Since the mechanisms already exist, it isn't "out of your way".

You mention telex. One interesting aspect of telexes is that contracts could be legally enforced if telex comms were used, since the endpoints were rented from trusted third parties. Not so for emails, of course.

You continue to have the mechanisms until all of the use cases can be satisfied by other means. I have indicated a couple of problematic cases.

Backward compatibility is very important. IBM and Microsoft never break backwards compatibility, for sound reasons. There are even some unchanged Win3.1 dialog boxes in Win11!

You can only keep backward compatibility going for so long. Eventually it just becomes uneconomical to maintain. You can only flog a dead horse for so long.

Australia has already said goodbye to PSTN lines, Frame Relay, public pager networks, Telex, ISDN and probably others I'm not aware of.

Handing over little bits of handwritten paper to transfer money between bank accounts is as archaic as the bank transaction books that used to be printed using a dot matrix printer over the counter.

I can't think of a single use-case, other than consumer stubbornness, that can't be satisfied with current technologies, in a faster, cheaper and arguably more secure manner.

As for backwards compatibility within operating systems; it wasn't that long ago we were running 16-bit applications and drivers. Look at where that support is today.

[jonpaul]

Bonjour,

After the inevitable hacks (banks, government, large firms) and possible future EMP your digital transactions will be at risk or lost.
Any important transaction should be preserved as paper and stored in a safe or deposit box.

DO NOT DEPEND ON ANY IMPORTANT ELECTRONIC PAYMENT TO BE PRESERVED .....MAKE A PAPER BACKUP.

In France and EU, chèques are used for ebay, le Bon Coin, etc as electronic payments like PayPal are not trusteed, and cost 3..10% fees.
In USA certain services , vendors will accept only cash or checks.



Jon

[ataradov]

Also, don't rely on the car, they inevitably break down. Any important transportation should be done by horse buggies.

[jonpaul]

Alex,  due to environazis,  your car will be gone/illegal/unuseable  in a few  yrs.

Your gov will require you to  wonderful public transport.

Jon

[ataradov]

I'm scared. I'll go live under the rock to prevent that.

Also, I'll be very happy to use public transport if it was not entirely broken in the US.

[mariush]

Here in Romania, I used to get paper cheques from Google Adsense and from a Canadian company I worked for as a freelancer, up to maybe 4-5 years ago.

Even back then, only one bank out of maybe 10 I asked was willing to accept my cheques as a private person (not company) and only if I agreed to deposit around 30$ in local currency (to cover their costs if the cheque is found to be invalid) and used to take 30 days to receive the money (I guess they waited until it was no longer possible for the other party to cancel the cheque or something like that). They would refund that deposit minus something like 10$ + 1% of cheque value in cheque processing fees

After a few months they started to give me the money in around 15 days and stopped asking for a deposit but it was still a pain in the ass.

Last year, I had another random cheque after I stopped dealing with cheques for ~2 years and discovered all the bank stopped accepting cheques.  Only one bank was willing to make some exceptions but you had to be a client of theirs for at least 6 months to even attempt, and I wasn't a client... so I just had the company send me money though paypal instead.

[johnh]

Many of the above posters not only do not like or use checks themselves, they want to stop everyone else from using them.

Precisely.

It would be good to hear from those that use cheques, to find their use-cases.

Banks would like to save money by phasing out cheques. Use of cheques is diminishing, therefore the costs are diminishing - and that reason for preventing cheque use doesn't hold water.

Banks should serve their customers, not dictate how the customers have to behave.

I don't think it's just on the Government/banks. Consumer and business habits dictate this.

There is a reason most businesses these days don't use Telegrams, Telex, or even fax for that matter. How long do you go out of your way to support obsolete methods?

Since the mechanisms already exist, it isn't "out of your way".

You mention telex. One interesting aspect of telexes is that contracts could be legally enforced if telex comms were used, since the endpoints were rented from trusted third parties. Not so for emails, of course.

You continue to have the mechanisms until all of the use cases can be satisfied by other means. I have indicated a couple of problematic cases.

Backward compatibility is very important. IBM and Microsoft never break backwards compatibility, for sound reasons. There are even some unchanged Win3.1 dialog boxes in Win11!

You can only keep backward compatibility going for so long. Eventually it just becomes uneconomical to maintain. You can only flog a dead horse for so long.

Australia has already said goodbye to PSTN lines, Frame Relay, public pager networks, Telex, ISDN and probably others I'm not aware of.

Handing over little bits of handwritten paper to transfer money between bank accounts is as archaic as the bank transaction books that used to be printed using a dot matrix printer over the counter.

I can't think of a single use-case, other than consumer stubbornness, that can't be satisfied with current technologies, in a faster, cheaper and arguably more secure manner.

As for backwards compatibility within operating systems; it wasn't that long ago we were running 16-bit applications and drivers. Look at where that support is today.

My mother who is her nineties was telling me about a friend of hers.  Her friend had to get some one to drive her to the bank in Box Hill, about 6.5k away from where she lived.
Didn't have a debit card. All she had was a transaction book.

[tszaboo]

I hope you guys can still pay in salt or silver coins. I mean, do the bad government want to get rid of directly exchanging donkeys for goods? Can you still use seashells though, right?