UK Payments Council Sets Timeframe for Cheque Guarantee Scheme
The UK’s Payments Council has announced that it believes that use of the cheque guarantee card scheme is in terminal decline and that this needs to be managed to provide clarity and certainty for users and acceptors. It has therefore taken the decision to set a timescale for managing the decline of guaranteed cheques and ultimately to close the scheme. The Council’s review has determined that a realistic timescale for withdrawing the scheme is two years: this is to ensure that the remaining users and acceptors have full information about the available alternatives. This means that the earliest the scheme will close is mid-2011.
The Payments Council’s decision follows consultation with consumers and businesses that still use and accept guaranteed cheques to understand why they still use them and to ensure alternatives exist. The Council believes that alternatives to the guaranteed cheque exist and are widely available, and that a well-planned withdrawal of the scheme will not cause any significant problems for users or acceptors.
Key facts include:
The payments industry will now need to confirm a viable date for closing the scheme. This decision does not mean that cheques cannot continue to be used. Consumers will still be able to write cheques and businesses can continue to accept them even after the scheme’s withdrawal. This decision does mean that some acceptors may want to plan to accept alternatives to cheques in the future, if they already don’t accept alternative payments.
Brian Pomeroy, chairman of the Payments Council said: “Having objectively considered the views and interests of all parties, we believe the aim should be to close the scheme in an orderly manner. This is preferable to the alternative of doing nothing, which would run the risk of further piecemeal withdrawal of cheque guarantee functionality by card issuers and reduction in acceptance by retailers, which could rapidly lead to consumer and acceptor confusion about the scope of the scheme and a general loss of confidence.”