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New paper-based payment system being considered

 

Cheques will not be phased out until an acceptable ‘paper-based’ alternative has been found, the Payments Council has said.

 

With cheques set to be stopped by 2018, the organisation has confirmed that it is looking at a new method of payment to help those who may find it difficult to use the electronic options.

 

It is thought that a new paper voucher system is amongst the alternatives being considered, while new electronic payment methods may include using mobile phones to send money via a text message.

 

The move has been welcomed by the Federation of Small Businesses (FSB), which said it was ‘pleased’ that an alternative paper-based system is being explored.

 

FSB National Chairman, John Walker, said: ‘Cheques are vital to the way many consumers and businesses operate, and with millions of cheques written every day, many small businesses will be disadvantaged - especially in rural areas - if the cheque is to be completely abolished.’

 

Cheques are thought to have been in use in the UK for around 350 years, but the number of personal cheques in circulation has been in steady decline as many Britons switch to faster electronic methods of payment.

 

Last year the Payments Council set a target date of 31 October 2018 for phasing out cheques, and the decision will be subject to a final review in 2016.

 

However, charities such as Age Concern and Help the Aged have expressed concern that the decision will encourage banks and retailers to begin the phase-out ahead of the deadline, placing many older people at a disadvantage.