Forgot your password?
typodupeerror
Government The Almighty Buck

UK Wants To Phase Out Checks By 2018 796

Posted by samzenpus
from the cash-or-credit dept.
The board of the UK Payments Council has set a date to phase out checks in a bid to encourage the advance of other forms of payment. They added, however, that the target of Oct. 2018 would only be realized if adequate alternatives are developed. "The goal is to ensure that by 2018 there is no scenario where customers, individuals or businesses, still need to use a cheque. The board will be especially concerned that the needs of elderly and vulnerable people are met," the Payments Council said in a statement.
This discussion has been archived. No new comments can be posted.

UK Wants To Phase Out Checks By 2018

Comments Filter:
  • Good Riddance (Score:4, Insightful)

    by Ethanol-fueled (1125189) * on Thursday December 17, 2009 @01:39AM (#30469956) Homepage Journal
    No more old ladies holding up the line for an hour because they're too technophobic to use a debit card.

    I'll shit bricks when they outlaw cash.
    • Re:Good Riddance (Score:4, Interesting)

      by MakinBacon (1476701) on Thursday December 17, 2009 @01:54AM (#30470080)
      As a former cashier who worked at a nationwide chain, I believe that the death of the check will be welcomed by those at all levels of retail. I have been involved in many horror stories caused by my registers check scanner accidentally tearing the check in half. Also, I had the awkward duty of explaining to people that their checks are no good and cannot be accepted without being able to tell them why (when the cashier scans your check, the register automatically does a background check).
      • by Ostracus (1354233)

        "Also, I had the awkward duty of explaining to people that their checks are no good and cannot be accepted without being able to tell them why (when the cashier scans your check, the register automatically does a background check)."

        When's this feature coming to credit cards?

        • Re: (Score:3, Informative)

          by MakinBacon (1476701)
          Actually, I had to inform them of their credit cards being denied, too, but that wasn't as awkward (for me, at least) because technically their bank was rejecting the card, not my store.
      • Re:Good Riddance (Score:4, Informative)

        by Richard_at_work (517087) <richardprice AT gmail DOT com> on Thursday December 17, 2009 @02:17AM (#30470268)
        In the UK, when you used a cheque in retail it has to be accompanied by a cheque guarantee card, which the retailer will copy details from - your bank basically gives you a card (usually its combined with your debit or cash withdrawl card, I've never seen a standalone cheque guarantee card) which tells the retailer how much the bank will guarantee to pay in *any* event when they take your cheque, which circumvents people drawing cheques on empty accounts. No cheque guarantee card, no cheque accepted, simple.

        That said, pretty much all of the UK retail base phased payment by cheque out in 2008/2009, so its pretty hard to find a place that will accept one these days anyway.
        • Re:Good Riddance (Score:5, Informative)

          by McHenry Boatride (1661199) on Thursday December 17, 2009 @02:42AM (#30470428)
          Cheques aren't just used in retail. Many small businesses - builders, central heating engineers, and others of that ilk - accept, and prefer, payment by cheque or by cash. They don't want the extra expense of accepting credit cards, and not all customers have access to electronic funds transfer.

          Some acceptable alternative, that doesn't involve having a computer of a rather insecure mobile phone, will need to be devised before phasing out cheques completely.

          • Re:Good Riddance (Score:5, Insightful)

            by jimicus (737525) on Thursday December 17, 2009 @03:10AM (#30470590)

            Some acceptable alternative, that doesn't involve having a computer of a rather insecure mobile phone, will need to be devised before phasing out cheques completely.

            Maybe we could write a little note with our bank details on instructing the bank to pay the small business? He could then take it to the bank and get cash - or even just put it straight into his account.

          • Re:Good Riddance (Score:4, Interesting)

            by AliasMarlowe (1042386) on Thursday December 17, 2009 @03:48AM (#30470796) Journal

            not all customers have access to electronic funds transfer.

            That's your problem, right there. Fix it.
            The capability for electronic funds transfer should be automatically granted with any bank account - both via debit card and via internet. In the Nordic countries, cheques are essentially extinct. If you try to present one at a bank, it is treated as a truly exotic item, and may cause confusion. The only cheques deposited are invariably from countries with backward retail banking (UK, US, Canada, etc.), and the clearing time and fees can be significant. On the other hand, electronic transfer to or from other accounts (worldwide) is fast and cheap, and provides immediate confirmation of receipt of the payment.
            I regularly pay vendors in Germany, Sweden, and Finland with direct electronic transfers via internet when making purchases or handling invoices. There is no risk of "delayed/lost in the mail" as happens to cheques with remarkable frequency. On-the-spot payments (small stores and large, petrol stations, vending machines, parking meters, etc.) are made using the debit card for the account. There is no need to carry wads of cash in your wallet, and shops do not have to handle or transport large amounts of cash.

            • Re:Good Riddance (Score:5, Insightful)

              by iamacat (583406) on Thursday December 17, 2009 @04:22AM (#30470972)

              What if you don't have an immediate access to electrons. Like say you are in one of the holes in AT&T data coverage that Verizon likes to show on a map? We still need a good old way to arrange offline money transfer between two people.

            • Re:Good Riddance (Score:4, Interesting)

              by QuestorTapes (663783) on Thursday December 17, 2009 @05:48AM (#30471558)

              >> not all customers have access to electronic funds transfer.

              > That's your problem, right there. Fix it.

              It's a problem, but not the only problem in the US.

              > The capability for electronic funds transfer should be automatically granted with any bank
              > account - both via debit card and via internet. In the Nordic countries, cheques are
              > essentially extinct.

              Most other nations have different financial protections on EFTs than here in the US.

              One root cause of this is that the banking system in the US grew from state-chartered banks, not federally-chartered banks. 50 states, all with different rules and regulations.

              Much of the current legal and technological infrastructure to begin to _consider_ phasing out checks in the US was only put into place post-911. At that time, the federal government was confronted with the fact that they had been nursemaiding a check clearing system leftover from the early 20th century, and even a brief interruption of airline service significantly impeded the ability to move huge boxes of paper checks across long distances quickly.

              The legal overview still isn't as good as it needs to be. People in the US are still advised by security and financial planners to use _credit_ not _debit_ cards, because the protections against errors and fraud are "bank policy" which can change in an instant, not "the law".

              Correcting an issue with bank errors in clearing a check required banks to put the funds back in place and follow a real procedure for resolving the issue quickly.

              With EFTs/Debit cards, banks are typically _very_ slow to restore the funds, and often glacially slow (and incompetent) at resolving the issues.

              Personal experience: I've set up EFTs for recurring bills at various times in the past. In each case, the bank was unable to complete some transfers, unable to cancel the transfer, unable to resolve the issue quickly, and I was charged for late payments. Some of these took several _months_ to resolve.

              > The only cheques deposited are invariably from countries with backward retail banking (UK, US, Canada, etc.)

              As noted by another poster, it isn't all retail. In fact, it likely isn't even _mostly_ retail that deals with checks. Small service industries: appliance repair, contracting/home remodeling, charities and non-profits, small-business suppliers and wholesalers, shippers and transport firms, any companies dealing with Asian, South American, or former Soviet-block nations need to deal in checks all day, every day. Or lose the bulk of the business they do.

              > electronic transfer to or from other accounts (worldwide) is fast and cheap,
              > and provides immediate confirmation of receipt of the payment.

              Not in the US, and the banks are shielded from the need to confirm _by law_. I'm also curious about the claim that it's fast and cheap (reliable implied) worldwide. I mentioned several regions above where checks are still common. I have no doubt that fast, cheap and reliable EFTs are available in all those regions. But are they reliable to all businesses in those areas? Sure, if you are dealing with a big Asian electronics, metals or chemicals supplier, I'm sure it's no problem. What about the small-lot specialty suppliers; do they have the same fast EFT access, with reliable transfers protected by law? I'm not so sure.

              > There is no risk of "delayed/lost in the mail" as happens to cheques with remarkable
              frequency.

              Not in the US, where delayed/misdirected, effectively "lost" EFTs are commonplace.

              > On-the-spot payments (small stores and large, petrol stations, vending machines,
              > parking meters, etc.) are made using the debit card for the account.

              Mostly true in the US; some things (parking meters) are not usually equipped for debit cards. In part, this is due to the fact that there are more parking meters in some major US cities than there are _people_ in some of the Nordic countries you mentioned. Since ownership and management of t

              • Re: (Score:3, Interesting)

                by CodeBuster (516420)
                As an American living in the United States I would just like to amplify what the parent is saying about the legal frameworks surrounding checks and credit cards. In the United States the banks are well known for dragging their feet on issues that the courts and regulators have not forced them to address. There are clear legal procedures and consumer protections in place for checks and credit cards, but the state of affairs with debit cards and electronic transfers is much more tenuous and is often a matte
            • Re: (Score:3, Insightful)

              by 2obvious4u (871996)
              I'm sorry there are still people in the world, and even the UK who don't have internet. Elderly in nursing homes come to mind.

              What about large purchases? I use my debit card for all small transactions, however when I paid the HVAC contractor I wrote a check. When I bought my car, I wrote a check. When I bought my house I wrote a check. For everything else I use electronic transaction, but there are lots of cases that a check is the best/only option.
          • Re: (Score:3, Interesting)

            by ommerson (1485487)

            You are labouring under the assumption that cheques are a cheap form of payment for small businesses. They are not, and as volume of cheques in use reduces, it is likely to become increasingly less competitive. I'd hazard a guess that payment by debit card is already a much cheaper way of doing business, and one in which payment is guaranteed (unlike cheques, which might bounce).

            The future is almost certain to be mobile card payment terminals of the kind used in restaurants, with a GPRS/3G data connecti

      • Re:Good Riddance (Score:4, Interesting)

        by iamacat (583406) on Thursday December 17, 2009 @04:12AM (#30470912)

        Not every business is a nationwide chain. Any two people can use a cheque for a transaction without paying a transaction fee or going through inconvenience of setting up a credit card processing service. If I have personal means to verify your trustworthiness I may accept your check regardless of your eligibility to get a credit card. And a pen works just fine when there is no possibility of a network connection to process a card. Just because something works for Wall mart doesn't mean that a street cornet vendor or a one-off private seller should be denied additional options.

      • Re:Good Riddance (Score:5, Insightful)

        by b4upoo (166390) on Thursday December 17, 2009 @07:26AM (#30472116)

        The alternative can not be automatic bill payment. I just had a situation in which an insurance company took an entire years premium instead of the agreed upon monthly payment. That triggered a cascade of overdraft fees to my account. The company involved did redeposit the money they accidentally took but they failed to pay for the overdraft fees that they directly caused. They will pay eventually but in the mean time I am short of over $100 in expenses generated by their error. Automatic bill payment is not safe enough to use in my opinion.

    • Re: (Score:2, Troll)

      by hexed_2050 (841538)
      I'd rather see the end to cash rather than cheques. I hate when people pay with cash.. sitting there holding up the line while they count their dimes and pennies, then end up dropping them. A card is so easy to use, swipe and done. One thing I don't like about cards is that they can track your purchases and locations.
      • Disagree. My observations of the coffee line indicate that cash is much quicker than cards.

        Exception being those women with gigantic purses that contain pennies buried somewhere deep inside.

      • Re:Good Riddance (Score:4, Insightful)

        by Wowsers (1151731) on Thursday December 17, 2009 @03:33AM (#30470738) Journal

        I would rather see the end of cards, what with people who can't even remember an insecure and hopelessly short 4 digit pin, or paying for a newspaper - on a card, or the communications breakdown between cashier terminal and the bank. These people all drastically slow down the "10 items" lines in a store, there should be cash tills only.

        Now credit and debit cards are coming out with contactless technology, so it will be even easier to steal money from your bank account, all without your knowledge, and as it's a small payment, the bank will do noting about the fraud.

      • You hate our freedom (Score:3, Interesting)

        by iamacat (583406)

        You are contradicting yourself. The unique property of cash is that the government doesn't need to know that you bought some communist books in Barnes and Nobles or that you arranged a private business transaction to voluntary introduce a mind-altering substance into your body. They are still free to jail you if you resort to violence as a result of getting stoned or your ideology. Something tells me that Britain's effort to mandate electronic payments is precisely to track thought crime and precrime.

  • by Anonymous Coward on Thursday December 17, 2009 @01:39AM (#30469958)

    If I wanted to buy a car from somebody, how would I do it? Right now the only reasonable options are PayPal, check, cash, or credit card. The only tender an ordinary person would accept for a car are cash and check, and most people wouldn't want to handle enough cash to pay for a car.

    dom

    • by remoford (520938) on Thursday December 17, 2009 @01:50AM (#30470054) Homepage

      I think you have stumbled upon the point.

      You can't do a paypal or credit card transaction in person with a stranger without the blessing of someone else (paypal or visa). And if you are using a significant amount of cash, they will presume it is a drug deal or money laundering or something nefarious. Large cash transfers are already defacto illegal in the US (see what happens if you get pulled over and have 50,000 usd in the passenger seat) although I can't speak for the UK.

      Governmental and corporate power is maximized when citizens can not do meaningful business amongst themselves.

      • by kestasjk (933987) *
        Call your bank and tell them you want to transfer the money, so what are my options. There will be a way, and it'll be more secure than something stupid like taking 50,000 USD around. No "governmental or corporate" power required.

        The weird thing is if you were allowed to carry around that kind of money and could make instant bank transfers of tens of thousands at the push of a button there'd be far more crime, and pleas for proper regulation. I'm actually kind of glad it takes a bit of effort to move $50
        • by remoford (520938) on Thursday December 17, 2009 @02:11AM (#30470216) Homepage

          That is precisely the point. One man's crime is another man's freedom.

          You might not think I should be able to sell my car, on the spot, provided I've got the pinks, to someone who likes it at the drag strip on a whim.

          I'll need a phone so I can ask someone else for permission first. To use my own money.

          Maybe you think that is nefarious. I think freedom to conduct business ought be a fundamental right.

      • by abigor (540274) on Thursday December 17, 2009 @02:03AM (#30470146)

        Bank transfers, Mr. Conspiracy Theorist. Cheques have been obsolete in much of Europe for years, yet there's no crushing dictatorship preventing people from giving money to one another.

        • by rve (4436) on Thursday December 17, 2009 @02:47AM (#30470458)

          Bank transfers, Mr. Conspiracy Theorist. Cheques have been obsolete in much of Europe for years, yet there's no crushing dictatorship preventing people from giving money to one another.

          Continental Europe here. Haven't used checks since the 80's, I didn't know they still existed. You used to put a bank transfer order in your bank's mailbox or mail it to them, but even that is something I haven't done this century, as it's so much more convenient to just enter a bank transfer order on your online banking web site.

          • Re: (Score:3, Informative)

            by dargaud (518470)
            I'm also in Europe and seldom use checks, but there are still many instances when you need them. Go to a store and buy something relatively expensive: a kitchen, a load of wood, a 2nd hand car... You can't use a credit card without maxing it. Granted, above a certain value you need to arrange for bank transfers.
      • Re: (Score:3, Interesting)

        by Necron69 (35644)

        I've stumbled into this problem recently myself, when my ex-wife switched bank accounts, and my payroll department suddenly realized it was illegal for me to be auto-depositing my child support to someone else's account (despite the fact that I've been doing it for four years). Since my ex now lives many hours drive away, and refuses to set up a joint account for deposits, this presents a problem.

        After some research, I was forced to conclude that even in late 2009, there is no way in the United States to ch

    • by BorgDrone (64343) on Thursday December 17, 2009 @01:53AM (#30470078) Homepage

      > If I wanted to buy a car from somebody, how would I do it?

      Transfer money from your bank account directly to theirs ?

      • by Weirsbaski (585954) on Thursday December 17, 2009 @03:09AM (#30470578)

        > If I wanted to buy a car from somebody, how would I do it?

        Transfer money from your bank account directly to theirs ?

        Taking it one step further, we could have a piece of paper that says how much to transfer, signed by the transferer to make it legal. Then there'd even be a paper trail that could be checked if there were any problems!

        Not sure what to call something like that, maybe "instant signed bank-to-bank transfer guarantee on paper receipt" (or "isbtobtgopr" for short)?

    • by IntlHarvester (11985) on Thursday December 17, 2009 @02:07AM (#30470186) Journal

      In my experience, people generally will not accept a personal check for an automobile. Cashier Check or Money Order.

    • by Richard_at_work (517087) <richardprice AT gmail DOT com> on Thursday December 17, 2009 @02:12AM (#30470228)
      You get a Bank Draft, which is accepted as cash at any bank but for the purposes of the transaction is the same as a cheque - just a convenient single bit of paper. In the UK this is the main alternative to paying for a vehicle by financing - quite a few dealerships will not take several thousand in cash.
    • by bbtom (581232) on Thursday December 17, 2009 @02:56AM (#30470498) Homepage Journal

      That's exactly the right point. The Payments Council don't seem to have really thought out person-to-person transfers or small business transfers. If someone wants to pay me money using a cheque, all they need to know is my name (or the registered trading name of a business etc.). With a bank transfer, you need to know the bank account details of the person - and nobody is quite sure as to how public bank account numbers ought to be. Cheque still rules for getting paid expenses too. I've done the PayPal thing, which is cool - except PayPal take a slice of the transaction. I've done the online banking stuff and it's painful - crappy websites, no notification (how about an e-mail from my bank every time a transaction goes through my account? GPG exists, goddamnit - use it!), security designed for the sort of people who set their passwords to "password1" and tell all their idiotic friends their MySpace password and then wonder why they get "hacked". If you think writing a cheque is inconvenient, how about carrying a laptop and 3G dongle around with you in order to do bank transfers on the website instead?

      Yeah, in shops, use a damn debit card. But for person-to-person transactions, cheques are pretty convenient. The security sucks, admittedly - a shared, public key that anyone can copy is not really security at all (a bit like credit cards: credit card fraud, at least until a few years ago, consisted of writing down the number and details that was given out to the merchant upon every purchase - that's real secure). But with cheques, you can post them - slip 'em inside birthday cards. You can give them to third parties (children, employees etc.) who can hand them to their eventual target. You can use them even where there isn't an Internet connection - and, well, outside of the big cities, there's plenty of rural countryside with no 3G service. You can post-date them, and the recipient can return them - my old school used to do this with their after-hours activity programmes - you'd give them half in a current-dated cheque and the other half in a post-dated cheque, so if you don't decide to finish the activity, they just return the second half of the payment.

      The only problem with cheques is that I have to walk to the bank to pay them in and it costs the banks money to process them. The walk is quite good exercise, and since the banks got £300 billion of taxpayers money last year under the Special Liquidity Scheme, and they pay themselves HUGE FUCKING BONUSES, I figure the odd 25p here or there to process my damn cheques is pretty reasonable. Not to mention the huge amounts they've had in fees and fines - fines they've charged me due to the ineptitude of other banks (who have web security models designed for the aforementioned idiots). Not to mention interest they make off the money we keep in them. They seem to want to have it both ways: they argue that cheques cost a lot to process AND nobody is using them. But if nobody is using them, surely the number of people you need to employ processing cheques is pretty minimal.

      While I'm ranting about banks, here's another thing: it's only in the last year that UK banks have actually got their shit together to be able to move money between accounts and it take less than four fucking days. A family member moves the housekeeping money from one account to another every month. He does this by going to one bank, drawing out however much it is (a few hundred pounds), walking down the street to the other bank and paying it in. Every time, the helpful bank assistant seems to suggest that he could do this electronically. The difference is, if you pay in cash, it is immediately available - while a BACS transer takes 3-5 days. They've only recently changed this so that it takes at most a few hours. But Christ-on-a-fucking-wheel, why did it take until 2009 to be able to move money instantly from one account to another? And it's still only certain banks that do the same-day transfers. These guys are absolutely retarded. With the billions they make every second, you'd think they'd be able to install a few broadband lines between their offices and make it so money can get transferred quickly. Three days - seriously?!

      'Too big to fail' presumes the banks aren't the epitome of fail to start with.

  • Wrong (Score:5, Informative)

    by hoofie (201045) <graeme@graemeanYEATSdkim.com minus poet> on Thursday December 17, 2009 @01:39AM (#30469962)
    It isn't spelt 'checks' it's 'cheques' in the UK - for fucks sake get it right.
  • by Anonymous Coward on Thursday December 17, 2009 @01:43AM (#30469990)

    I hadn't seen a check in Finland for over 10 years. Then I come to US and find out it's the common way to pay bills. And transfers from bank account to another one are difficult or even impossible between two random people.

    • by addsalt (985163) on Thursday December 17, 2009 @01:50AM (#30470044)

      And transfers from bank account to another one are difficult or even impossible between two random people.

      You should try writing a check - works great.

      • by kestasjk (933987) *
        How long does it take?
      • by eggnoglatte (1047660) on Thursday December 17, 2009 @02:47AM (#30470454)

        Well, except that the recipient of the check has to run to the bank for the deposit instead of just verifying online that the money has arrived. Likewise, I have to hand-write a check for my rent every month, rather than just going online and clicking a button to transfer a pre-registered amount to a pre-determined destination account (or just setting up a completely automatic monthly transfer).

        Banking in North America is so far behind Europe, it is not even funny. Quite an adaptation when I moved back to Canada.

        • Re: (Score:3, Insightful)

          by mdm-adph (1030332)

          Or in the US you could do it through the incredibly backwards way of setting up BillPay (for your rent) with your bank (like I do), at which point your bank will actually mail a paper check each month to your rental office, just so it can eventually find its way back to them and be cashed.

          It's ridiculous.

  • by JoshuaZ (1134087) on Thursday December 17, 2009 @01:50AM (#30470052) Homepage
    We have cryptographically secure algorithms for anonymous digital cash. These schemes are easy to implement using blind signatures. http://en.wikipedia.org/wiki/Blind_signature [wikipedia.org]. If properly implemented such a system provides far more anonymity than cash, checks, credit cards or debit cards. We really should be working to switch to such a system.
    • by kestasjk (933987) *
      Above all else my money must be anonymous!
    • Re: (Score:3, Insightful)

      by seifried (12921)
      Yeah, because governments that are supported by taxation of financial transactions are going to LOVE anonymous cash.
    • by rolfwind (528248)

      No.

      The more the government tightens its grip, the more stagnant the economomy becomes. I believe they'll only push digital cash if the government can tax every red cent that it can. They first came for the gold in the 1930s and what was left were fiat greenbacks.

      Now all that will be left are binary 1s and 0s?

      Don't sign me up. I'll deal with the hassles of cash, thank you very much.

      Oh, and replace the ridiculous and costly-to-administer-and-enforce tax system with something sane:
      http://www.apttax.com/ [apttax.com]

    • by Valdrax (32670) on Thursday December 17, 2009 @02:38AM (#30470400)

      We have cryptographically secure algorithms for anonymous digital cash.

      But who wants that? The little people? Hah.

      There are only two institutions that could create and support an anonymous cash-free financial system: the government and big financial institutions. Where is a motive for either one that is more juicy than the possibilities of being able to track every monetary transaction you engage in?

      Privacy is a tool of the people to evade control by those with too much interest in their day to day lives. No one with power wants to give that to the common man, and if some of us little people got together to try to build a network for handling cash out of the government's and the banks' eyes, it would be tied up in anti-terror laws faster than you can say, "Hawala."

      Honestly, cash is something that would not be allowed to be invented today if it didn't already exist and wasn't too hard to get rid of.

    • Re: (Score:3, Insightful)

      by Blue Stone (582566)

      >We have cryptographically secure algorithms for anonymous digital cash. [...] We really should be working to switch to such a system.

      Never going to happen.

      The government - any technologically advanced 'Western' government, but specifically the British - will never accept anonymous over monitored; tracked; recorded or vetted *anything* where there is the option of doing one or the other or both.

      Information is power - and they like their power over the serfs too much.

  • Sounds Hard (Score:4, Interesting)

    by pgn674 (995941) on Thursday December 17, 2009 @01:57AM (#30470110) Homepage
    Every month, I pay my landlord (a professor; I'm his only tenant) with a check. I wonder what system would replace that, that would be significantly different from checks, but that my landlord could accept?

    Also, what if I run over someone's bicycle, and I want to give him a blank check to pay for it? Or, more realistically, what if I need to pay an individual that I have only just met more money than I have in cash? What system could replace that that would be significantly different from checks?

    I guess it could be done, but it might take some creativity.
    • Re: (Score:3, Informative)

      > Every month, I pay my landlord (a professor; I'm his only tenant) with a check. I wonder what system would replace that, that would be significantly different from checks, but that my landlord could accept?

      A standing order.

      > Also, what if I run over someone's bicycle, and I want to give him a blank check to pay for it? Or, more realistically, what if I need to pay an individual that I have only just met more money than I have in cash?

      If you're going to give black cheques away to strangers,
    • Re:Sounds Hard (Score:4, Informative)

      by MichaelSmith (789609) on Thursday December 17, 2009 @02:25AM (#30470320) Homepage Journal

      Here in Australia direct bank transfers pretty much fill the niche not filled by cash. The other person gives you their bank account details. You use your bank web site to transfer money to the other account.

  • I can understand wanting to phase out personal cheques but a bank draft is a payment instrument that is drawn ahead of time into the account of the bank that issues it. How do they handle large purchases without at least a bank draft?
    • Talking out of my hat, i doubt it has anything to do with bank drafts, which are really very different instruments in practice.

  • What's the backup plan in case a massive solar flare fries our power and computing infrastructure? Have we reached the point where that's the end of civilization anyway? Or am I underestimating the ability of people to muddle through on cash an informal IOUs for a while in a pinch?

  • god damn yankees (Score:2, Informative)

    by Anonymous Coward

    we call em cheques

    oh and "how do people pay each other?" = in kind

  • Obligatory (Score:2, Funny)

    by Himuanam (852822)
    I felt a great disturbance in the Force, as if millions of slow-writing middle aged women suddenly cried out in terror.
  • Gold (Score:5, Funny)

    by WarJolt (990309) on Thursday December 17, 2009 @02:12AM (#30470224)

    Gold is about the only thing that's going to be worth anything by 2018. Maybe they should be phasing out cash too.

    • Re: (Score:3, Insightful)

      But what can you make out of gold? What can you grow on gold? How do you eat gold? Can i get energy out of gold?
  • Money spinner (Score:4, Insightful)

    by GumphMaster (772693) on Thursday December 17, 2009 @02:45AM (#30470446)

    Personal cheques are a purely a cost to the average bank, shuffling paper and checking signatures does not make them scads of cash. They'd dearly love to replace them with credit cards for which they get to charge an annual fee to the card holder, monthly and annual fee plus a percentage commission from the merchant, and any interest accrued by the card holder at the usual inflated rates, and all riding on the back of a process that is essentially automated (reduced staff costs). Even the direct deposit substitute is a good money spinner with limited numbers of "free" transactions per month before fees kick in, and charges for daring to use an ATM. What's not for a bank bean counter to like about this?

  • Checks and transfers (Score:3, Interesting)

    by otter42 (190544) on Thursday December 17, 2009 @03:02AM (#30470538) Homepage Journal

    I lived in France for four years, using checks. Now I live in Luxembourg and use bank transfers. I much prefer bank transfers. It's easier, faster, less prone to fraud, etc...

    However, a couple things bank transfers don't do that checks do:

    1) Security deposits: recently my fiancée and I reserved a monastery in France. We had to make a deposit of, what is for us, a significant amount of cash. With checks this is easy. He has a check, which is only valid if we don't show up, and we have a year to pull together the money. If he has hard cash, first of we lose access to that cash for a year. Second, if he doesn't deliver the goods, he has the cash, and all we could do about it is sue him!

    2) Large amounts between individuals: we're selling our car and aren't quite sure what to do. Obviously cash is a little inconvenient, but a wire transfer happens at a bank or online. So neither of these work as nicely as a check either. Of course, I'm certain there's some way around it, but until an online bank transfer happens immediately, it won't be as nice and secure as a check.

    • Re: (Score:3, Insightful)

      by cgenman (325138)

      At the risk of overposting in this thread, never accept a normal check for a car. You want a money order or a bank certified check (which really isn't a check at all). Accepting a normal check for a car is just asking for fraud.

  • by CaptainOfSpray (1229754) on Thursday December 17, 2009 @03:26AM (#30470704)
    There are lots of small businesses that will be damaged or made unprofitable. When taking low volumes of payments, where a cheque is much more cost-effective than taking cards, for instance the weekends-only kind of bed & breakfast - getting a card terminal costs £400 and just isn't worth it - that £400 represents our profit for an entire summer.
  • by 200_success (623160) on Thursday December 17, 2009 @04:45AM (#30471138)

    Having lived in Switzerland for a while and experienced the cheque-free banking system there, I can say that cheques suck on so many levels. Handing or mailing someone an IOU in the form of a cheque is stupid when you consider the alternative.

    In Switzerland, and I believe in most of Europe, payments are pushed rather than pulled. The receiving party sends the paying party a standard slip with the receiver's account information and amount being billed (or the payer could fill out a blank slip manually). The payer feeds the slip to his own bank's ATM and authorizes the payment. Or, he keys in the information to his bank's e-banking website. Alternatively, they payer can take the slip to any post office and pay with cash. The transaction clears the same day.

    Compare that with a cheque-based system:

    • The receiver's bank has to demand money from the payer's bank, and typically imposes a hold period on that money.
    • The payer doesn't know when the receiver will deposit the cheque; the possible delay makes reconciling accounts a bit messy.
    • The receiver doesn't know whether the cheque will bounce -- he's just getting an IOU.
    • The payer can easily overdraw his account, through carelessness or maliciousness, and be penalized by both his bank and the receiver.
    • The receiver can claim that the payment wasn't received on time, due to mail delays, hold periods, etc.
    • The payer can claim that the "cheque is in the mail", when of course it hasn't been sent yet.
    • The payer has to worry about whether the receiver has tampered with the cheque (e.g. altering the amount).
    • The bank has to authenticate the cheque by verifying the signature, which probably doesn't happen properly in most cases.
    • Because the authentication system is basically based on trust, the payer is exposed to massive cheque fraud [stanford.edu]! Sending a cheque means giving out your account information, which is just as bad as giving out your credit card number. A receiver-pull system is inherently less secure than sender-push. If everyone agrees to do sender-push only, there is no risk involved in revealing your account information.

    There are only two advantages of cheques that I can think of:

    • Giving someone a casual gift. You can easily write a cheque as a birthday or wedding gift, knowing just the recipient's name. In those situations, it could be socially awkward to ask for the recipient's account information.
    • Paying someone who doesn't have a bank account. I understand that many poor people (illegal immigrants?) in the U.S. don't have bank accounts. They end up taking their paychecks to some check-cashing place that charges a hefty fee. This is a rather weak "advantage", since checks are a sub-optimal solution anyway -- possible sane solutions would be to stop hiring illegal immigrants, or let them have bank accounts, or pay them in cash.

    In summary, a cheque-based banking system is so completely backwards and broken, it's amazing that such a system could exist in the modern world.

Never ask two questions in a business letter. The reply will discuss the one you are least interested, and say nothing about the other.

Working...