New push to axe traditional pay method

The Albanese government’s bid to modernise the country’s payments system could mean scrapping the use of cheques by 2030.

But before that’s set in stone, Australians are being asked to give feedback on the future cheques.

Treasurer Jim Chalmers and Assistant Treasurer Stephen Jones launched two consultation papers on Friday, seeking public feedback on the future of Australia’s payments system.

Earlier this year, the government announced its intention to wind down the use of cheques by 2028, with legislative requirements for them to be scrapped by 2030.

At the time, Dr Chalmers said Australia’s payments system needed to remain “fit for purpose” to ensure it delivered for “consumers and small businesses”.

Almost all of retail cheques could be serviced through internet or mobile banking, as could 100 per cent of those used in institutional and commercial settings, he said.

Dr Chalmers has described leaving cheques in the system as “an increasingly costly way of servicing a declining fraction of payments”.

The consultation paper on cheques has been made public on the same day as a paper proposing a modernised regulatory framework for payment service providers.

That paper recommends that payment service providers be regulated based on the activity they perform under Australian financial services laws.

In the government’s statement on Friday, Dr Chalmers and Mr Jones said Labor was releasing the two papers to “progress our plan to ensure Australia’s payments system delivers for our modern economy”.

“We are making meaningful changes that will help make our payments system more seamless, safer and stronger and suitable for the times,” the pair said.

“Whether it’s cheques, payment cards, digital wallets or cash, a competitive and efficient payments system is essential to support the business of everyday Australians.”

About 35 per cent of all card transactions in the June 2023 quarter were made with digital wallets – up from 10 per cent in early 2020.

Nearly two-thirds of Australians between 18 and 29 use mobile payments, according to the Reserve Bank, as opposed to just 9 per cent of people aged over 65.