Charities encouraged to plan for the end of the cheque

Charities need to start preparing now for the withdrawal of cheques as a method of payment in just over eight years, according to payments processor Rapidata Services Plc.

The Payments Council announced yesterday that cheques will be withdrawn as a payment method by 2018.

Currently, alternative payment options include:

• Credit card / debit card

• Direct Debit (for regular or one-off payments)

• Internet payment / bank transfer

• Smartcard (similar to Oyster card) swipe technology.

Scott Gray, Rapidata's Managing Director, said: "Cheques have been around for 350 years, but their use has been in decline for many years now and it is no surprise that they will be gone in little over eight years.

"While this may seem alarming to many charities who currently receive a significant number of cheque donations, a lot can happen in eight years and the Payments Council has committed to review the decision in 2016, ensuring that suitable payment alternatives are available."

He pointed out that eight years ago, the public weren't used to using smartcards and payment by mobile phone, so systems and the public's acceptance do change.

According to the Cheque & Credit Clearing Company, in 2008 cheques were used to pay £1.4 billion compared to £8.32 billion by debit card and £2.05 billion by credit card. Automated payments accounted for £6.01 billion too.

Gray argued that "this move is a positive opportunity to engage with supporters and convert them to more cost-effective means such as Direct Debit or Credit Card".

Rapidata is informing all its clients about the change, advising them to get ready for the changeover from cheques to alternative payment mechanisms. The Payments Council has outlined within its report the importance of supporting third sector groups, amongst other key stakeholders in preparing for this change.

www.rapidataservices.com

Photo: The Daily Mail objects to the end of cheques (front page on 17 December 2009). Howard Lake on Flickr.com.