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It’s checkout time for the humble cheque book

Banks are moving to dump cheques as a payment system, leaving older people vulnerable.

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  • Finance
  • Read Time: 6 mins

Key Points

  • RBA says “days are numbered” for cheques. 

  • CBA ends new cheque accounts. 

  • Seniors concerned at lack of alternatives. 

The end of the once-ubiquitous cheque book is at hand – and that is upsetting many seniors who don’t have access to alternatives. 

One National Seniors Australia member told us, “The non-use of cheques will adversely affect many older people who do not want to use, or do not have the facilities to use, internet banking. 

“Many of these people will find it difficult to make payments without cheques, and this will cause stress.  

“They will need to rely on other people to do their transactions or, make transactions in cash, neither of which are safe methods,” the member wrote. 

Bank’s advice

On its website, the Commonwealth Bank of Australia is telling customers: 

From June 2023, we’re making changes to the way our customers order cheques. 

  • Some new accounts will no longer have access to a chequebook facility. 

  • Existing accounts will no longer have replacement cheque books issued automatically. 

Looking to the future

Shoebox cash

During the pandemic, Australians hoarded extra banknotes, with 1.8 million on issue worth $90.1 billion at the end of June 2020.

But that cash is sitting in shoeboxes, with a surge in tap-and-go payments and a drop in people paying with notes at the nation’s retailers.

The move away from cheque accounts was laid at the door of the Reserve Bank of Australia, whose former Governor, Philip Lowe, was reported to have told a Parliamentary economic committee that ditching the cheque book was in the “national interest”. 

He added that “at some point though, collectively, I think it’s in the national interest that we close the cheque system”. Mr Lowe acknowledged some people did rely on cheques, particularly in regional Australia, and alternatives needed to be provided. 

“Over time, technology will solve this problem but probably not just yet,” he said.

The Sydney Morning Herald reported that the committee also scrutinised the future of cash, with Mr Lowe saying payment methods have changed many times over the course of human history. 

“There’s ... uncertainty over the next decade over what the future of banknotes is,” he said.

“I don’t think Bitcoin is going to replace it, but certainly people are moving to electronic payments and the number of transactions made with banknotes is declining. You can see that in the ATM withdrawals, which have declined very dramatically.” 

Out of favour

Expensive washing?

Washing machines and the backs of couches may be the nation’s little known ‘bank’. The Reserve Bank estimates we’ve ‘deposited’ or, more accurately, lost $8 billion of cash.

Up to one in 10 banknotes has been waylaid, including having been chewed by the family dog or simply forgotten.

Cheques have been losing favour, and currency, over recent years, replaced by electronic transfer systems. 

The SMH reports that in the 12 months to the end of November, the number of personal cheques drawn in Australia fell by 27 per cent while commercial cheque numbers was down by 30 per cent.

Over the past decade, the number of personal cheques written has slumped by 85 per cent to just 915,000 a month, while commercial cheques tumbled by 88 per cent to fewer than 1.9 million.

Cheques are now mainly used for property settlements and even that is waning.

The Commonwealth Bank provides advice on alternatives to cheques here.

For related reading: SMHCommonwealth Bank

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