Consumers incurring huge costs by sticking with cheques
CONSUMERS are incurring huge costs by continuing to be enthusiastic users of cheques.
Small firms and consumers have emerged as the groups most likely to use cheques, despite the fact that this method of payment is expensive.
The average consumer writes 19 cheques a year. Stamp duty of 50c, bank charges and the cost of postage mean that this method of payment costs almost €26 a year for the 19 cheques.
A new survey from the Central Bank found that across the economy, we issue around 84 million cheques a year – second only to France in terms of intensive cheque usage.
Over one-third of all cheques are written by consumers, according to the study by Central Bank economist Ronnie O'Toole. This amounts to 37 million cheques written by ordinary people every year.
Each cheque costs the sender and the person or firm receiving it an average of €3.55 – in stamp duty, bank charges and postal charges. Most other European countries have moved away from using cheques.
Dr O'Toole said that high cheque usage was one of the main reasons we have a late-payments culture in this country. The study shows that small firms seem to be obsessed with cheques.
The Central Bank and the Government are anxious to foster more use of electronic payments.
This is despite one in 10 cheques coming from state departments and agencies.