Older Aussies to be hit hardest by cheque phase-out

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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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Written by Leon Della Bosca

Leon Della Bosca is a voracious reader who loves words. You'll often find him spending time in galleries, writing, designing, painting, drawing, or photographing and documenting street art. He has a publishing and graphic design background and loves movies and music, but then, who doesn’t?

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52 Comments

Total Comments: 52
  1. 0
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    I always use a cheque where possible. Unfortunately a lot of businesses now refuse to accept them.

  2. 0
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    My bank account has a limit of $2000 for online transactions including BPAY, so I find writing a cheque very useful for larger transactions, above that amount.

    We recently built a carport and double bay shed and progress payments were around $4000 which I paid by cheque. Although the builder took over a week to present the cheques, they were an acceptable form of payment. Alternatively I would have had to go into the bank branch to arrange the teller to transfer the payments from my account. So yes, I still find cheques useful.

  3. 0
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    I can’t see the need to get rid of cheques now they can be presented online. I just scan them with no need to take them to a bank.

    • 0
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      Really? That sounds really insecure. Why can’t someone just get a person’s cheque book and overlay a photoshopped signature on the cheque.

    • 0
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      I doubt if signatures are even checked now. I just scan cheques using my tablet and select the bank account I want it to go into.

      I also now just scan all Medicare and receipts for my health fund as well.

      Love all this tech stuff as it makes my life a breeze.

  4. 0
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    I saw a check sent to me from a company that had overcharged me , it was for about $12 dollars, I had to go to the local PO to deposit it because the small bank, I’m with, has now moved its branch about 8 ks away. It was a nuisance and I had not dealt with a cheque for so long I can’t remember, even a tax return goes into your bank directly , has for years.
    So convenience is how I’d describe the new idea of dropping off of paper cheques.

    One thing though, in this modern world, the day that your pay packet became a direct to your bank account happening, from employer to your bank account, was the day you lost control of anything to do with what you earned net, because any charges etc the bank wanted or needed they got the capacity to just take it.
    It is what led to the banks becoming over zealous and criminal in some areas, by technology giving them too many chances to do the unfair or the blatantly wrong thing. But as for convenience its OK.

    • 0
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      What you earned net has nothing to do with the bank, but with the payroll system your employer uses. They input the hours of work, or leave you had, then anything else was computed by the payroll package, including the tax rate (usually updated with the current tax rates after the last pay in June every year). Once the payroll is prepared and reports done & checked, the banking file is transferred to the banking system. BTW I was a payroll clerk, and some packages actually let you set up 2 or even 3 accounts to split your pay into.

      I’ve never heard of a bank charging a fee to accept your pay into your account. There are some deposits and payments to/from your bank account that are fee-free. They have to be by law, and one of them is depositing your pay or pension payment, and the other is internet banking transfers and BPay.

      If you have an account which charges fees to accept deposits or for you doing internet banking transfers etc, I’d suggest you search for a bank that doesn’t charge you anything – making it a fee-free account, especially if you’re over 55 or are on a concession card.

    • 0
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      SuziJ – totally agree with you. I too worked on payroll for far too may years. Even from days when an armored truck would bring the cash to our office, and we had a special cash office where where we made up pay packets. MY – how things have changed! I have never heard of any bank charging to have your wages deposited (is actually illegal). I have worked with payroll software systems that allow you to split your (nett) wage up to 5 accounts. Depositing wages into bank allows you to have access to your money from next day, whereas with a cheque, you had to wait a few days for clearance, and bad luck (with cheques) if there were public holidays as meant longer delay to your money.
      I also have never heard of a bank charging you to deposit your own money.

  5. 0
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    For those older Australians who have always used cheques and perhaps start going into dementia, any new system, particularly if on line, would prove impossible. I know a number of people who refuse to have a computer. Some of them have smart phones but only use them for texting or phone calls.

    • 0
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      BPAY by phone (landline or mobile) is the next best thing if you don’t want to use a computer and its not the same as the “tap” that some do on their mobiles

    • 0
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      I agree Tood. It’s just something different, anything different (!) that causes problems. I shop a lot on line and love PayPal, but know people who are frightened by the thought of shopping on line or anything that doesn’t involve a hard copy, eg, a cheque or invoice through the mail…

    • 0
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      Its more common than I think the banks realise. There is no way I would use my phone for banking transactions.

    • 0
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      No problem using your phone for banking transactions if you have VPN installed.

    • 0
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      I fully agree with Jennie here and can not understand the terms some of you are using , like BPAY or VPN . At my advanved age , I just want my transactions uncomplicated , without fear of becoming another person cheated out of the little money I have left .I am also a great believer in Cash whenever possible and if Cash and Cheque were the only means of payment , a lot of Australians would not be in financial trouble .

  6. 0
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    Just one more thing the Banks don’t want to deal with…..geesus

    The banks would be pushing this hard…..
    ext thing NO CASH whatsoever…

    Big Brother the ATO will know every transaction you make…..

    The brave new world

    • 0
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      Yes, I like to keep my spending private – I don’t want the bank, or government authorities to know what I do with my money so I use cash for most of my shopping and bill paying. I consider it is my business what I do with my money.

    • 0
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      If you are on welfare you will soon have everything monitored when the welfare card is rolled out to everyone on welfare.

  7. 0
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    Still get a few payments in cheques but have not written one in years. Grew up with no cheques, had to get used to them coming to Australia 50 odd years ago and now I suppose have to get used to do without them. Pay cash for all my bills, post office mostly, rates directly to the council office. Used credit card quite a bit but now they started charging extra it’s back to cash. Might have to get used to live without cash in time who knows. Smart screens are a challenge for my old eyes and my fingers are too large for the buttons. I am sure I am not alone in this.

  8. 0
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    There are times when cheques are very useful. Especially for people who don’t trust digital banking and do not have online accounts.

  9. 0
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    I have not used cheques for over 15 years. I either pay with a credit card, pay cash or do eftpos. I do not do banking on the internet. My method works well for me, well, most of the time…..the day the AYM swallowed my card with no warning and no cash was a bit of an issue!

    • 0
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      Card swallowing is a big problem, I use mine at the club ATMs, costs $2 a time but I always get my card back as it is not swallowed in the first place. Machine tells you when to take it back out and you have a grip on it at all times.

    • 0
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      I can’t remember the last time I used an ATM or used cash.

  10. 0
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    Just another way to disturb older people. Dispensing with cheques is a form of discrimination, as it is older people who in many cases are not tech savvy who will be discriminated against.

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