An entire generation has probably never even seen a cheque, says finance analyst.
A form of payment familiar to most older Australians will soon become a thing of the past, says Reserve Bank of Australia governor Philip Lowe.
In his address to the 2019 Australian Payments Network Summit, Mr Lowe said that the “sharp decline” in cheque usage across Australia in the past two decades means the payment type will soon be phased out in favour of digital payments.
“Over the past year, the number of cheques written has fallen by another 19 per cent and the value of cheques written has fallen by more than 30 per cent, as the real estate industry has continued to shift to electronic property settlements,” said Mr Lowe.
According to the Australian Payments Network, cheque usage in the country has fallen by 83 per cent in the past decade. However, Canstar analysis of RBA figures revealed that in 201,7 there were still more than 81 million cheques written by individuals or businesses.
Use of cash is also declining, while debit and credit card payments have increased in tune with the evolution of digital payment systems.
So, get ready to say goodbye to cheques, says the governor.
“At some point, it will be appropriate to wind up the cheque system, and that point is getting closer,” he said. “Before this happens, though, it is important that alternative payment methods are available for those who rely on cheques. Using the NPP (New Payments Platform) infrastructure for new payment solutions is likely to help here.”
Finder insights manager Graham Cooke said that instantaneous payments were preferable to the time it took for a cheque to clear, adding that an entire generation had probably never even seen a cheque in their lives.
“While there’s been tremendous progress with cheques sometimes clearing within one business day and many smart ATMs processing them, they are still a pretty ancient form of banking,” he told Yahoo Finance.
Mr Cooke admitted that older Aussies would be hit hardest by the loss.
“This will likely impact older Australians who still give birthday money in the form of cheques, but will have little impact on younger Aussies,” he said.
“With the ability to carry your driver’s license and Medicare card digitally in some states, there really is no need to carry a chequebook or wallet around any more.”
Will you miss cheques if they are phased out? Or have you already adapted to digital payment systems?
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