The Australian government has launched a public consultation on the removal of cheques from the country’s payment system.
The move was part of a strategic plan to modernise Australia’s payment system with digital products.
“There has been an almost 90 percent decline in the use of cheques in the past ten years, as people and businesses have swapped to more convenient and faster ways to make payments,” the paper said.
“As cheque use declines, the cost of processing a cheque will continue to increase.”
Via the consultation, the federal government hopes to receive the necessary feedback to implement a smooth and orderly transition to alternative forms of payment.
Government’s Roadmap to Phasing Out ChequesThe government has proposed dividing the transition into five stages.
In the first stage, banks and financial institutions will stop issuing cheques to customers by 2025, followed by an end to the issuance of commercial and government cheques by 2026.
In the third stage, the government will stop individuals from issuing cheques by 2027 before ceasing the acceptance of personal, commercial, and government cheques by the end of 2028.
Finally, the government will ban individuals and organisations from accepting bank cheques and close the cheque system by the end of 2030.
Meanwhile, the government also identified six conditions required for a smooth transition, including providing sufficient grace periods for consumers and businesses to adjust, providing education and support for cheque users, and offering appropriate alternatives.
According to government data, cheque payments made up just 0.05 percent of the value of all retail payments in Australia in the 2022-2023 financial year.
This figure revealed the dramatic decline of cheques as a payment system, considering that cheque use accounted for approximately 85 percent of all non-cash payments at its peak in the 1980s.
In the past decade, cheque transactions dropped sharply as people moved to online banking and other digital payment methods (from just under 200 million transactions in 2013 to 27 million in 2022).
The consultation is open to the public until Feb. 2, 2024.
Macquarie Bank to Ban Cash and Cheque ServicesAs the federal government moves to modernise its banking system, commercial banks across the country are already ahead of the curve.
The bank will also cease allowing cash withdrawals and deposits at its branches with the National Australia Bank.
According to the bank’s transition plan, Macquarie will stop issuing new chequebooks to customers from January 2024 before completely phasing out its telephone banking system in March and its cheque system by May 2024.
Australia’s postal service is now coping with a spike in demand due to the closure of regional bank branches.