We are well into the digital age and the number of Australians using cash continues to drop. My two sons, both in their 20s, almost never have cash on them. Just about the only time they do is when giving it to me, accompanied by a request to deposit it. For them, it’s all card, or more accurately now, phone. And there are cheques. I’m not even sure if either of my sons would recognise a cheque!
Cheques do still exist, although they’re certainly no longer in common use. Most industries have transitioned away from their usage, and the remainder aim to do so. One such industry, however, has struck a number of hurdles in their attempts to ‘de-cheque’ their operations.
The industry in question is insurance. And when you think about it, that’s understandable in a way, particularly when considering life insurance. Many life insurance payouts will be given to the surviving spouse who, in most cases, will not be young. For the oldest generation of Australians, accepting a large payment by means other than cheque is a challenge.
That in turn presents a challenge for insurers, who are planning to make the transition away from cheques.
Do they really have to transition away from cheques?
There’s an element of irony associated with the answer to this question. You’ve probably read of the federal government questioning the rate at which rural bank branches are closing. That questioning has arisen from concerns about how older Aussies will cope without a local branch.
In the case of the insurance industry and cheques, we have the opposite scenario. The federal government is pushing the transition away from cheques, and it is the insurance industry that believes the time frame may be too aggressive.
However, it is not the government’s time frame that’s concerning insurers. They believe the government’s timetable, to end all cheque usage by 2030, is very reasonable.
It is, in fact, the banks that are presenting the industry with challenges, according to insurers. Responding to a Treasury consultation paper, Winding down Australia’s cheques system, the Insurance Council of Australia (ICA) flagged banks as a stumbling block.
Banks cheque out
In its submission, the ICA outlined a shortened time frame in transitioning away “due to recent announcements by banks regarding changes to cheque services from 2024”. This is a broad reference to a number of Australian banks that have announced the cessation of cheque processing this year.
Macquarie Bank, the Bank of Sydney and Bank Australia have all announced dates in 2024 on which cheque processing will cease.
In theory, such issues can be overcome through simple provision of bank details by customers to insurers. But the ICA says many older Australians are reluctant to do so, especially in light of regular scam warnings.
Acknowledging, the banks’ haste, the ICA said it will be forced to accelerate its own cheque transition timetable. “This has required our members to aim for implementation by 2024 rather than 2026,” it stated in its submission. “Cheque access and services provided by banks may vary during the transition.”
The ICA said banks will have to assume the responsibility of keeping customers informed of their options concerning cheques. “Customers will need to be properly informed by their banks to understand whether cheques will still be accepted,” it stated. “That information will inform customers’ preferred method of receiving payments or decision to open additional accounts to continue to accept cheque payments.”
Plan ahead
Whatever grace period banks offer insurers, the day you will no longer use cheques is fast approaching. Some of you will be unsure of how to best deal with this transition. You would be well advised to discuss this with staff at your local bank branch – if you still have one.
Were you aware that the demise of the cheque is looming? In what ways will this affect you? Let us know via the comments section below.
Also read: Banks blasted over interest rates for savers – and those onerous conditions
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It is inevitable that cheques will go the way of the dinosaurs very soon.
“Albanese” never thinks about the older people, does not give one S..T about them, god I love this man?? so yes what about the older people! I live in a small town YARRAM Vic, all our 4 banks we had have been closed for over 12 months for some and longer for some others, we have one bank the BENDIGO! and this bank does not have a good name. I will never bank with this bank not many do, I’m a older female and class myself as being bloody old now!! but I’m one of the lucky ones I can do all my banking on line, Rent and Insurance for me and insurance for my beautiful dog are all direct debit I pay all my normal bills using BPAY on line, BUT! and I mean but! what about the other older people some with disabilities, who cant use a computer? have never had a chance to learn or even want to use a computer, Andrew you have stated your two boys in their 20s hardly have and use cash? and even said about using their phones because they knew how to put their cards in their phones? yes, young ones know how to do this NOT the older people! I read about this putting your cards in your phone? do you know how many older people do not have smart phones!! they have just a basic mobile phone, yes you can still buy them most older people dont want smart phones they would not know where to start with one, when I did read about putting cards into these smart phones I thought no way could I work this one out and I can’t and won’t and I never use my phone for any buying or banking, do not trust these phones I’ve had enough of all this new technology, its been a very long time since I used a CHECK ever since I learned to do internet banking, should say I had to learn! no banks in this town made me try harder to learn, and this small town has a very lot of older people and most I would say would still use CHECKS, and a lot only use a Debit cards at the ATMs to draw their cash out they need cash, like me if they lose their debit card, accidentally drop it and that is easy to do, anyone can pick that card up and use it and it takes a long time trying to get back the money someone has used from your bank, they need cash it’s hard trying to live on a pension and harder if you lose your debit card if you have one` a lot harder now with No banks here, hours and hours you spend on the phone trying to report your card is missing?? it’s a joke! this is why older people who don’t know how to use a computer need their CHECKS and CASH! they can pay their bills at the post office but that can be hard for them, its a small post office and has taken on banking cash for people who need to, so sometimes these frail older people some with disabilities have to stand and wait to pay a bill, it’s not fair that this government is taking over our lives. let them have their CHECKS so much easier for them to be home and write a check to pay a bill then have someone post it for them. and cash for shopping… About time “Albanese” brought in another vote? this time for our older people the ones who he should be looking after Yes/No for CHECKS and CASH too easy he will lose again. maybe he should have another trip to JAPAN and ASIA but this time to see how they look after their older people….
You mean “cheques”.
I don’t know why you are so angry with the PM. This has nothing to do with him. You do realise before the current government was elected just 18 months ago, the coalition was in power for 10 years?
Banks need to be regulated they are controlling our country we need ACCC to investigate their massive profits ripping off their customers, closing branches, stopping use of cash. Unfortunately our spineless politicians rely on the banks for healthy donations to their parties.