In its report into the treatment of the poor old cheque, the Treasury select committee has called for regulation of the Payments Council, which currently has no public accountability, arguing that the banks should lose their ‘unfettered power’ to decide the future of payment methods. It added that the man in the street has the right to be ‘suspicious of the motives’ of the Council, given that only one of its board members represents non-banking interests. You can see their argument: the banks do tend to find the processing of cheques to be a pain in the safety deposit box.
The excited committee has come to several conclusions: that banks and building societies should consider reintroducing the cheque guarantee card, which was abolished in July; and that the ‘delays and uncertainty’ inherent in the cheque clearing system should themselves be cleared up; and that banks should write to all customers stating that cheques will continue to be honoured ‘for the foreseeable future’ (more effective we presume than writing out 500 times ‘I mustn’t get rid of things that aren’t mine to bin’).
While the majority of us may have moved naturally to cards, PayPal and bank transfers, plenty of people still rely on cheques – their use has fallen by 70% since 1990, but 1.1bn of the things were still issued in 2010. The public seems unusually keen to keep cheques going – and you’d expect banks may wish to give the public what they want at the moment, given all the bail-out help they’ve been given.
But while it's good to see someone gallantly leaping to the defence of public interests, you have to question the MPs' timing. The Payments Council set the 2018 target date for the phasing out of cheques way back in December 2009, claiming they were in ‘terminal decline’. Surely that would've been the time for the Treasury select committee to act if they really wanted to do anything about it.
And beyond the rights and wrongs of arguably hastening the demise of a still functioning payment method, the writing may still be on the wall for cheques. The Treasury select committee is only in a position to make recommendations, and while it will be a positive voice of the public, it’s unlikely to be enough of a drive to force banks into the costly process of reinstalling all the cheque guarantee technology they’ve just consigned to the scrap heap. Plus to do so will make the banks look like idiots. And will they really speed up cheque clearing? Given that they want to get rid of cheques they’re more likely to make the process drag on even more.
Meanwhile, there’s other mischief afoot. Banks are closing their branches at a rate of three a week. Figures from the British Bankers' Association showed that 187 branches owned by Santander, Barclays, HBOS, Royal Bank of Scotland and Natwest closed last year. So it seems if you’ve got any complaints over cheques, you’d better get to your branch ASAP. Otherwise you may have to wait in a telephone queue…