The UK’s Cheque Guarantee Card Scheme — used by retailers for more than 40 years — will be withdrawn for good on 30th June.
Businesses have had the option of accepting a cheque with a guarantee if it was accompanied by a customer’s card carrying the Shakespeare logo, but with guaranteed cheque usage in rapid decline over the last decade, the scheme has become outdated.
The Payments Council — which sets strategy for payments in the UK — has liaised with businesses to set an end date after deciding that letting individual banks withdraw it in their own timescales might have caused confusion.
Jacqui Tribe, manager of the UK Domestic Cheque Guarantee Card Scheme, says that a large percentage of guaranteed cheques are actually written in situations where the guarantee can no longer be applied anyway, such as where the customer has posted the cheque rather than presenting it in person.
“Since peaking in 1990, when over one billion guaranteed cheques were written, numbers have dropped twelvefold to just 88 million in 2009 — making up only 7% of cheques written,” she adds.
Theuse of Chip and Pin, and even online payments, means that many retailers will already have moved away from the cheque guarantee system, although Tribe does point out that although the scheme ends on Thursday, some businesses may continue to accept cheques after that date.
“Recent industry-wide changes mean that a cheque offers guaranteed funds after a set timescale, a certainty that wasn’t available when the Guarantee Scheme was first introduced,” she says. “This change was introduced in 2007, and means that at the end of the sixth working day after paying in a cheque, you can be certain that cheque funds are yours and would only ever be reclaimed if you were a knowing party to a fraud.”
The ending of the scheme has again put the spotlight back on the removal of cheque usage altogether. Tribe says the issue is being independently reviewed.
“The Payments Council has set a target date of 2018 to close the central cheque clearing, however this date is provisional and will only go ahead if acceptable alternatives are in place and being used by all those who currently rely on cheques,” she says.