The UK Payments Council says it is working with banks to develop an alternative paper-based payment method as part of a commitment not to leave customer "high and dry" when the cheque clearing scheme is finally abolished.
The Council has already set a provisional target of 2018 for the abolition of cheques, with a review scheduled for 2016.
The move has been slammed by consumer groups, small businesses and charitable organisations, which rely on cheques as an established payment mechanism. The Payments Council has promised to develop alternative electronic payment methods that can meet the needs of all consumers.
However, in a progress update, the Council holds out a fig leaf to the lobbyists: "Where there there are gaps in the current range of payment options, we will look to foster innovation and investigate the feasibility of providing a paper-based method of payment, to address the needs of some consumers who are highly dependent on cheques and who may find it difficult to migrate to the electronic alternatives."
Richard North, chairman of the Payments Council says: "By setting a target date for closing cheque clearing, we know we have set ourselves a massive challenge in developing alternatives that work for customers and that people will choose to use in place of cheques."
Payments Council research shows that 55% of consumers are still not aware that a target date of 2018 has been set to close the cheque clearings. Of those (42%) that are aware of a target being set, a quarter believe that the date is either next year or in 2012.
Finextra, a UK based independent newswire and information source for the worldwide financial technology community commented on this breakthrough announcement as follows;
“What form could this innovative new payment method take, we ask ourselves. A piece of paper with a space for a signature, payee name, cash amount and date, perhaps? Amazing! Whatever will they think of next?”