The future of cheques

14 April 2011

The Commons Treasury Select Committee is to reopen its inquiry on the future of cheques given continuing public concern about possible moves to phase out this method of payment by 2018

The then-Treasury Committee launched an inquiry in February 2010 on the future of cheques and took evidence from a range of organisations, including the UK Payments Council.

At that time the Committee was unconvinced by  the Payment Council's argument that cheques were in 'terminal decline' and expressed concern about the rigour of the cost–benefit analysis undertaken by the Council.

Commenting on this evidence Treasury Committee Chairman, Andrew Tyrie MP, said:

"The Payments Council had seemingly forgotten about the millions of people who remain less at ease with the latest technology.

Since our last inquiry we have been inundated by letters from the public telling us that they rely on cheques.

Many charities, small business and vulnerable people - including pensioners -  depend on cheques. Their needs must be considered.

They should not be forced into shredding their cheque books.

We will also want to examine whether it is in the public interest that apparently competition, can and should, be set aside on this.

I was shocked, when the Payments Council last gave evidence, that they had not conducted a rigorous cost benefit analysis.

We asked them to go away and do some number crunching. In this new inquiry we can now examine their latest conclusions and work."


In December 2009 the Board of the UK Payments Council announced that cheques would be phased out by October 2018, but that this would happen only if alternatives were developed. The Council stated that it had decided to set the date for proposed abolition so far in advance to encourage the development of other forms of payment.

The Council also took the decision (in September 2009) that the Cheque Guarantee Card Scheme would close on 30th June 2011. It will no longer be possible to guarantee a cheque under the Scheme after this date.

Terms of reference

The Committee has decided to reopen its inquiry on cheques given continuing public concern about the potential abolition of cheques. Evidence is sought on:

  • trends over time in the use of cheques as a payment mechanism, including estimates of likely usage over the next five to ten years
  • the advantages and disadvantages of abolition, including the impact of abolition on particular groups in society
  • analysis of the likely costs and benefits of the abolition of cheques
  • progress in the development of suitable alternative payment mechanisms
  • the decision to close the Cheque Guarantee Scheme and the implications for cheque usage and the future of cheques

The Committee will also be examining the structure and performance of the Payments Council. The Committee is interested in receiving written submissions that address the following points:

  • whether the Payments Council is sufficiently accountable for the way its decisions impact on consumers
  • how well the Payments Council is delivering on its core objectives
  • how the Payments Council's work fits with the industry's efforts to reduce the level of fraud?

The Payments Council was established in March 2007 as a membership organisation comprising payment service providers who meet qualifying payment volumes. Its three core aims are:

  • to have a strategic vision for payments and lead the future development of co-operative payment services in the UK
  • to ensure payment systems are open, accountable and transparent
  • to ensure the operational efficiency, effectiveness and integrity of payment services in the UK

The Office of Fair Trading published a review of the Payments Council in 2009.

Submitting evidence

Written evidence in connection with the inquiry should be sent to the committee by 12 noon on Friday 6 May 2011.

Further Information

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