Cheques consigned to history books as State looks to future
"Will you take a cheque?" The answer, increasingly, is 'no'. Changing consumer habits and a government drive to cut costs means cheque books will soon be consigned to the history books.
The Government has now formally set a date for their demise. From September 19, 2014, government departments, local authorities and state agencies will no longer use cheques – a date creatively entitled 'EDay'.
There's no doubt that we have plenty to gain from this approach. Writing a cheque is expensive, with a 50c government stamp duty charged on each one and banks who charge up to 30c to process them.
If the cheque is posted, there is an additional 55c for a stamp. This can take the total for just one cheque to €1.35. Writing just one cheque a week will cost a householder around €40 a year.
The National Payments Plan, announced by Finance Minister Michael Noonan in April, estimates that the country will save up to €1bn a year by switching over from cash and cheques towards electronic payments.
But there is always resistance to change and Irish people are almost unique in their fondness for paper money.
Withdrawals at ATMs here were down by a fifth in the past five years, from 205 million transactions to 167 million a year, while the value of ATM withdrawals has decreased by 30pc, from €29bn to €20bn. But the value of cash withdrawn is still 66pc higher than the EU average.
And while payments using cheques have clearly declined over the same period, with the amount written down 35pc from €117m a year to €76m, this usage still far exceeds levels seen in other member states.
A Central Bank study earlier this year showed that Ireland was the second-largest user of cheques in the EU after France.
Businesses will be most affected by their phasing, since, according to the Central Bank, some 56pc of all cheques are made payable to businesses, while just 34pc are issued by consumers to each other.
Cheque usage is dominated by the elderly and the farming sector.
But businesses are clearly coming around to the idea. New research from Danske Bank found that just 13pc of Irish businesses believe that the demise of the cheque will have a negative impact.
Electronic banking services are increasingly important to Irish companies and banks are well aware of this. Several have launched online tools for small businesses in the past year, including AIB, whose new service allows businesses to manage payroll through "the cloud" (internet storage).