Britons turn to plastic as cheque usage falls - Money - News - Moneyfacts


Britons turn to plastic as cheque usage falls

Britons turn to plastic as cheque usage falls

Category: Money

Updated: 09/09/2010
First Published: 09/09/2010

This article was correct at the time of publication. It is now over 6 months old so the content may be out of date.

Consumers are increasingly shunning their chequebooks in favour of their debit cards.

Once the dominant payment method after cash, cheques are to be phased out in the coming years, with a target date of 31 October 2018 for them to be abolished.

And figures from the Payments Council show that the public are using cheques less and less.

Cheque usage dropped by £21.5 billion, down by a tenth in the second quarter of 2010, compared to the same period in 2009, with businesses and consumers switching to faster and more convenient payment methods.

Each day of the quarter, an average of 290,000 fewer cheques were written than the year before, over three fewer per second.

The use of cash machines, an indicator of the amount of cash used for transactions, also fell by £1.6 billion, a decline of 3.2%.

Credit card spending was also weak, rising by just 3.9%, barely ahead of inflation.

It represents a migration to debit cards, with the value of payments made on them rising by £7.9 billion year on year.

There was also a huge expansion in transfer activity. Faster Payment – transferring money between accounts – picked up the slack left by cheques, recording a rise of £16.9 billion, an increase of 67%.

It shows that consumers and businesses are taking advantage of being able to make instant transfers, a world away from the time when people were forced to wait for days for a cheque to clear.

The total value of payments in the UK economy fell by 0.6% in the second quarter of 2010.

"The payments revolution continues apace in the UK," said Sandra Quinn, director of communications. "Cheque usage is shrinking dramatically, while credit cards hold less appeal for consumers and businesses."

"We use cash less where there is an easy alternative, but we're years away from cash falling out of fashion. Debit cards are taking over our daily purchases, while Faster Payments are fast becoming how we transfer our money electronically."

"The overall payments figures show a distinct lack of energy in the UK economy. The recovery may be underway, but total payment values are not suggesting a dramatic return to strong growth."

Find the best credit card rates - Compare credit cards

Disclaimer: Information is correct as of the date of publication (shown at the top of this article). Any products featured may be withdrawn by their provider or changed at any time.

Related Articles

Parents to spend £552 on children this half term

Autumn has truly arrived – and half term with it. This looks to be bad news for parents’ wallets, as research from American Express shows they will be spending an average of £276 per child this holiday break.

Are you still funding your children’s lifestyle?

While many parents like to provide financial support to their children while they grow up, often helping out with things like weddings, cars and university fees, others find that they fund more of their children’s lifestyle than they’d like.

Household spending on Christmas drops again

Brace yourselves: tomorrow we’ll be just 70 days away from Christmas. As 39% of Brits have already started their holiday shopping, research has found that household spending on Christmas has fallen for the second year in a row.