Older Aussies to be hit hardest by cheque phase-out

An entire generation has probably never even seen a cheque, says finance analyst.

older man using a calculator and paying by cheque

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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    COMMENTS

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    casey
    16th Dec 2019
    12:01pm
    I always use a cheque where possible. Unfortunately a lot of businesses now refuse to accept them.
    East of Toowoomba
    16th Dec 2019
    12:21pm
    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.
    Tood
    16th Dec 2019
    12:50pm
    You can change the online limit to suit for a one off large transaction and then change it back again the same day

    16th Dec 2019
    12:26pm
    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.
    Rosret
    18th Dec 2019
    11:20am
    Really? That sounds really insecure. Why can't someone just get a person's cheque book and overlay a photoshopped signature on the cheque.
    Anonymous
    18th Dec 2019
    12:00pm
    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.
    john
    16th Dec 2019
    12:40pm
    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.
    SuziJ
    16th Dec 2019
    1:27pm
    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.
    sunnyOz
    16th Dec 2019
    1:56pm
    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.
    Jennie
    16th Dec 2019
    12:47pm
    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.
    Tood
    16th Dec 2019
    12:53pm
    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
    Jennie
    16th Dec 2019
    12:59pm
    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...
    Rosret
    18th Dec 2019
    11:22am
    Its more common than I think the banks realise. There is no way I would use my phone for banking transactions.
    Anonymous
    18th Dec 2019
    12:09pm
    No problem using your phone for banking transactions if you have VPN installed.
    Oldman Roo
    18th Dec 2019
    4:37pm
    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 .
    panos
    16th Dec 2019
    1:26pm
    Just one more thing the Banks don't want to deal with.....geesus

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

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

    The brave new world
    Dancer
    16th Dec 2019
    5:59pm
    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.
    Anonymous
    18th Dec 2019
    1:00pm
    If you are on welfare you will soon have everything monitored when the welfare card is rolled out to everyone on welfare.
    Mariner
    16th Dec 2019
    1:34pm
    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.
    Rosret
    16th Dec 2019
    1:39pm
    There are times when cheques are very useful. Especially for people who don't trust digital banking and do not have online accounts.
    Mariner
    16th Dec 2019
    1:41pm
    Yep, Rosret, I am one of them but still do not need cheques.
    Troubadour
    16th Dec 2019
    1:46pm
    I agree Rosret - I do not trust on-line banking at all. I still use cheques from time to time and our bank does not charge for Age Pensioners.
    patti
    16th Dec 2019
    1:41pm
    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!
    Mariner
    16th Dec 2019
    1:45pm
    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.
    Anonymous
    18th Dec 2019
    2:56pm
    I can't remember the last time I used an ATM or used cash.
    Ming
    16th Dec 2019
    2:03pm
    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.
    arbee
    16th Dec 2019
    2:25pm
    Either way the banks still use a money for a period of time on the short term money market and make millions every year doing so. As soon as the cheque hits the bank it comes straight out of the drawers account. They then take several days to clear it making full use of the money themselves. Pay online and it comes straight out of your account as well, and then in the majority of cases can take a few days to go into the receivers account.
    Greg
    16th Dec 2019
    10:20pm
    Garbage, you have no idea.

    Cheques are debited to the drawers account tonight and the funds go into the payees account the SAME NIGHT. Just because you can't draw against it doesn't mean the money isn't in your account. A number of days are allowed for the cheque to be returned if it isn't paid at the drawers bank, BUT as I say the money is in your account and the bank doesn't have it to earn interest on.

    This is 2019, online transfers usually are next day between banks now.
    Viking
    16th Dec 2019
    2:37pm
    I haven't written a cheque in years. When they occasionally arrive from companies they are a nuisance as my local bank agency has closed and we have to drive 24km to pay them in. Online banking is by far the easiest and cheaper, no stamps required!
    almost a grey hair
    16th Dec 2019
    3:00pm
    Just looked in banking folder in filing cabinet ,last cheque written July 2016.
    What I,m concerned about most is how much cash can you deposit in the bank without the bank or ATO asking where you got it from
    Greg
    16th Dec 2019
    10:21pm
    $10,000 OR if the bank are suspicious of you they can do a report for under $10,000.
    almost a grey hair
    16th Dec 2019
    3:01pm
    is it 2k or 5k
    almost a grey hair
    16th Dec 2019
    3:01pm
    is it 2k or 5k
    Buggsie
    16th Dec 2019
    3:20pm
    You can deposit up to but not including $10,000 in cash at an intelligent ATM or into the Post Office or Bank without question, as long as you don't do this too regularly. Be aware that banks will question smaller amounts if there is a history of such deposits over a short time - its completely at the bank's discretion as to what they report to the regulators when amounts under $10,000 are involved.
    Greg
    16th Dec 2019
    10:22pm
    Spot on
    inquisitive
    16th Dec 2019
    3:31pm
    I use a chq occasionally to give a small amount of money to one particular charity, I wouldn't like to direct debit for this purpose.
    KeWi
    16th Dec 2019
    3:32pm
    The government is already working hard on getting rid of cash - see Currency (Restrictions on the Use of Cash) Bill 2019 currently awaiting Senate Approval.
    Of course, the cynics among us might think this is a precursor to being able to control and devalue your savings as we perhaps move into a negative interest rate world.
    robmur
    16th Dec 2019
    5:01pm
    Why not use direct debit? For the last 30 years we have used this method of payment for all of our bills. Have never, never had a problem using this method. Years ago when my parents were still alive, I set up direct debits for all their bills. Prior to that Mum and Dad would carry large amounts of cash and go from business to business paying bills. Once I set up direct debit for them, they couldn't believe how simple it was. If you are unsure as to how to set up direct debit get a relative to set it up, or go your bank and get them to do it on your behalf. Dead easy, saves fussing about writing cheques and the have to post them. Male life easier for yourself, I guarantee it.
    Incognito
    17th Dec 2019
    3:35pm
    My real estate agent does not give me this option to pay my rent unless I use a third party which charges me money to pay.
    robmur
    16th Dec 2019
    5:01pm
    Why not use direct debit? For the last 30 years we have used this method of payment for all of our bills. Have never, never had a problem using this method. Years ago when my parents were still alive, I set up direct debits for all their bills. Prior to that Mum and Dad would carry large amounts of cash and go from business to business paying bills. Once I set up direct debit for them, they couldn't believe how simple it was. If you are unsure as to how to set up direct debit get a relative to set it up, or go your bank and get them to do it on your behalf. Dead easy, saves fussing about writing cheques and the have to post them. Male life easier for yourself, I guarantee it.
    Carol Christopher
    16th Dec 2019
    9:14pm
    I donate by writing cheques. It is harder for charities to put you on ongoing payments deliberately or accidentally. It also gives me time to mull over how much how I'm going to donate to each charity as I write them in bulk.
    Golden Oldie
    16th Dec 2019
    9:44pm
    Before you phase out cheques, why not improve the time it takes to make the BPay and direct debit payments. It is rediculous that in this current technology that it takes up to 3 or more days to transfer money to pay a bill, and payments apparently are not done over the weekend. Surely it can be done automatically?
    Elinka
    16th Dec 2019
    11:39pm
    I personally think that to leave older Australians without possibility of writing cheques will be very improper and rather ruthless since many of us don't know anything about computer don't have it and don't understand the Apps how to operate. I have friends who don't know anything about this kind of payment, they don't have children who can help and they are really straggling with all the things in their life.
    Pass the Ductape
    17th Dec 2019
    8:45am
    What's behind all of this is the desire for future governments and by definition, powerful individuals, to discover the monetary reserves of every single person - and from there, knowing exactly how those people spend every cent of those reserves - because he/she who controls the purse strings will slowly erode your right to individual choice and eventually control every other aspect of your life!
    BillF2
    17th Dec 2019
    12:35pm
    I use cheques. They provide a convenient record of my transactions, let alone there is no artificial limit on payments. Payment of bills via the Post Office with one cheque makes it even more convenient. So what's the problem? Maybe they are not teaching kids how to read and write, so they will be unable to use this 'oldies' form of money transfer. More likely though, is that Philip Lowe is doing the government's bidding and trying to phase out any untraceable form of transaction, so that the government can keep tabs on everyone. Welcome brave new world!
    old frt
    17th Dec 2019
    1:16pm
    How are you going to pay for larger items you buy privately (car , boat , caravan etc ). how many sharks are going to disappear as soon as they see the EFT deposit in their account. Evan buying from a dealer is going to take some convincing , to transfer the cash before you can take delivery next day .
    Incognito
    17th Dec 2019
    3:33pm
    I only recently got a cheque book to pay my rent, otherwise would have to use a third party payment system that wanted to charge me money for paying my rent. And because I have a limit on how much I can withdraw on my account I could not use my debit card without making 2 trips in a week. (40 minute round trip to real estate agent.) And they do not except cash to pay rent either. I use to pay into their bank account but they said they were changing that and we had no choice to pay via the new system. All this digital paying is costing us more money.
    Circum
    20th Dec 2019
    4:15pm
    I do regularly use cheques to pay utility bills as well as for larger purchases.On current performance maybe its the RBA that needs to be phased out.
    Circum
    20th Dec 2019
    4:15pm
    I do regularly use cheques to pay utility bills as well as for larger purchases.On current performance maybe its the RBA that needs to be phased out.
    Boomah52
    21st Dec 2019
    6:06pm
    And soon in Aust when the wind stops blowing and a big cloud comes over you will have nothing lol.
    Ozzieg
    22nd Dec 2019
    9:06pm
    I have one membership which still asks for payment by cheque or money order. Most members are well over 60, and may not understand direct debit.
    My cheque book disappeared for a while when moving house, as I use it so rarely, so I had to go to the post office for a money order!
    Hairy
    24th Dec 2019
    11:23am
    It should be illegal for businesses to charge fees for using a debit card,its the same as cash.