No plans to phase out business cheque payments
The Forum of Private Business (FPB) has welcomed plans to keep cheques as part of the payments system until adequate alternatives are in place.
The Payments Council, which is the organisation that sets the strategy for UK payments, had mooted the possibility that cheques be phased out by 2018 following a decline in their use.
However, the Payments Council’s new National Payments Plan looks set to safeguard cheques for the foreseeable future.
Brian Pomeroy, chairman of the Payments Council, said: “We are fully aware that alternative arrangements to cheques have to be available before the closure of the cheque clearing service can be seriously contemplated.”
The FPB, in lobbying for the retention of cheque payments, pointed to a recent survey which showed that three-quarters of small businesses believed that ‘customer forces' should determine the rate at which payment by cheque is phased out.
Almost half of those firms that responded to the survey thought that scrapping cheque payments within the next seven years would harm their businesses.
Some 95 per cent of firms said that they regularly paid other businesses by cheque, while 55 per cent reported that cheques were their most frequent means of payment.
Yet despite their importance to smaller businesses, cheques were listed as second only to cash as the least favoured method of payment, the survey found.
Six out of ten businesses said that, when receiving payments, they preferred BACS which sees payments made directly from one bank account into another.
Philip Moody, the FPB’s senior member services representative, said: “The FPB’s research and anecdotal evidence shows that, even in a world filled with electronic telecommunications, many small businesses, including start-ups, still rely on cheque payments. Holding back the phasing out of cheques is a common-sense response.”