Cheques will soon become a thing of the past, Reserve Bank of Australia governor Philip Lowe has confirmed.
In a speech yesterday, Lowe pointed to the “sharp decline” in cheque use across the past two decades and said individuals and businesses were pivoting to digital forms of payment.
“Over the past year, the number of cheques written has fallen by another 19 per cent and the value of cheques written has fallen by more than 30 per cent, as the real estate industry has continued to shift to electronic property settlements,” he said.
In the last decade years, cheque use in the country has fallen by 83 per cent, according to the Australian Payments Network, but in 2017, there were still more than 81 million cheques written by individuals or businesses, according to Canstar analysis of RBA figures.
At the same time, use of cash is declining while uptake of debit and credit cards has risen as the payments system innovates and becomes near-instantaneous.
And this means cheques will get phased out, the governor warned.
“At some point it will be appropriate to wind up the cheque system, and that point is getting closer,” he said.
“Before this happens, though, it is important that alternative payment methods are available for those who rely on cheques. Using the NPP infrastructure for new payment solutions is likely to help here.”
Finder insights manager Graham Cooke said that the days of cheques and cash were numbered.
“While there’s been tremendous progress with cheques sometimes clearing within one business day and many smart ATMs processing them, they are still a pretty ancient form of banking,” he told Yahoo Finance.
A whole generation has grown up without having seen cheques with their pay being directly transferred to their bank accounts, Cooke added – and cash is next to go.
If cheques disappear, older Aussies will be hit hardest, he said.
“This will likely impact older Australians who still give birthday money in the form of cheques but will have little impact on younger Aussies.
“With the ability to carry your driver’s license and Medicare card digitally in some states, there really is no need to carry a chequebook or wallet around any more.”
Make your money work with Yahoo Finance’s daily newsletter. Sign up here and stay on top of the latest money, news and tech news.