The board of the UK Payments Council, a body composed of England’s top banks, has voted to phase out paper checks by 2018. With the rise of electronic bill pay, the old tried and true method of paying by check is becoming, not only obsolete, but also expensive. According to a Reuter’s report, it costs nearly a British pound (roughly $2) to process a check.
We ought to see this as a sign of things to come for the U.S. as well. Our banks and economy, similar to Britain’s, are moving towards greater streamlining through electronic payments. People demand the speed and efficiency of electronic and on-line banking. The paper check has already become obsolete for many purchases (on-line shopping, for instance), and retailers are increasingly refusing to accept personal checks as a means of payment. Many retailers see checks as an unnecessary invitation to fraud. Others see it as an unnecessary complication in payment processing relative to the debit card efficiency and speed.
There is some concern, however, as to the effect the loss of paper checks will have on the elderly who haven’t, up until now, utilized electronic methods of payment or bill-pay. It seems obvious, though, that the innovation of electronic banking has finally reached such a point that older methods have become obsolete and those who are still using paper checks will have to change their purchasing habits.
Luckily, there is time for this change. Britain isn’t going to phase out paper checks until 2018 and so consumers there will have 8 years to get used to paying their bills without paper. In the U.S., the decision to phase out paper checks hasn’t yet been put on the table, though, we expect that with the expense associated with processing paper checks and the current financial crisis, it is only a matter of time.