Why keep them artificially alive?

Let’s face it: Cheques are expensive to process, more exposed to fraud, unpredictable and old fashioned.

So why should we keep them artificially alive - as suggested by Martin Ruda in this article on Director of Finance Oline.

Those who live by processing cheques may have an interest in keeping them alive for as long as possible but they cannot stop the inevitable.

Cheques were practical and useful in the 2nd millennium, but not in the 3rd. Payment technology has been developed that can process payments much cheaper, more securely, and with a faster transfer time electronically.

Then why stick to the old medium?

In most cases it is just out of old habit and because people are afraid of the unknown – and to some electronic banking is an unknown.

Cheques are almost extinct in many mainland European countries, about time that UK (and the US for that matter) follow suit.

The new Payment Service Directive, which will regulate the payment industry in all of EU from November 1st this year, specifically excludes cheques, as they are national mediums and their importance are minimal in most European countries.

The future is with mobile payments, payment portals like PayPal and electronic banking.

Today the banking portals provided by most banks for SMEs are quite good. Some even offers liquidity forecasting tools that work well, giving the financial managers in SMEs predictability in future the cash flows – something that cheques don’t offer.

Any effort to extend the life of cheques (like Cheque 21 in the US) is a waste of time, money and effort.

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