Cheques to Disappear in Australia by 2030

Cheques to Disappear in Australia by 2030
A National Australia Bank cheque is seen in Melbourne, Australia, on Sept. 7, 2012. (AAP Image/Julian Smith)
Alfred Bui

Australians will soon say goodbye to cheques as the federal government has introduced plans to abolish the paper-based payment system by 2030.

On June 7, the Australian government announced that it would completely phase out cheque usage no later than 2030 as part of a strategic plan to modernise the country’s payment system.

The government also said it would stop using cheques and move to new forms of payment by the end of 2028.

Speaking at an Australian Banking Association conference, Treasurer Jim Chalmers said the nation’s current regulation framework fell behind developments in the financial system.

“Our policies and regulations predate the development of mobile payments,” he said.

“The infrastructure that a lot of businesses and governments use for functions like payroll, the bulk electronic clearing system is clunky. It’s inefficient and it’s cumbersome to maintain.

“And we haven’t had a coherent sensible strategy to phase out costly means of exchange, like cheques, something that’s already been achieved in other economies like ours.”

Why the Government Phases Out Cheques

In explaining the reason behind the abolishment of paper-based payment, the treasurer said cheque usage in Australia had plummeted 90 percent in the past ten years due to people switching to cheaper and easier digital transactions.

He added that 98 percent of retail cheques and 100 percent of those used in institutional and commercial settings could be serviced through the Internet or mobile banking.

“All of this means that leaving checks in the system is an increasingly costly way of servicing a tiny and declining fraction of payments,” Chalmers said.

“That’s why we want to systematically transition these transactions to digital to improve the efficiency of this sector and getting Australians their money faster as well.”

Treasurer Jim Chalmers during the Budget lockup at Parliament House in Canberra, Australia, on May 09, 2023 . (Photo by Martin Ollman/Getty Images)
Treasurer Jim Chalmers during the Budget lockup at Parliament House in Canberra, Australia, on May 09, 2023 . (Photo by Martin Ollman/Getty Images)

While the treasurer said the government would take the lead in adopting new forms of payment, he noted that the national transition would be “gradual, coordinated, inclusive and respectful.”

Chalmers also said the federal government would work with state governments and the industry to ensure that every Australian got the support they needed to transition away from cheques.

According to the Commonwealth Bank of Australia–the country’s largest commercial bank, many advanced European economies long ago removed cheques from their financial systems, with Finland cancelling them in 1993, the Netherlands in 2001 and Denmark in 2017.

Following the government’s announcement, the Australian Banking Association (ABA) welcomed the overhaul of the nation’s payments system.

“A productive world-class economy needs a modern and efficient payments system. Today’s announcement is a long overdue overhaul of the payment arteries that drive the Australian economy,” ABA CEO Anna Bligh said in a statement.

The CEO said the proposed regulatory reform would ensure that Australia’s payment system was well-equipped to respond to changes.

“Australia is currently operating under payments legislation that was created in 1988. The proposed changes announced today will help ensure clear consumer protections apply no matter who is processing your payment and that the security of customers’ personal and financial information is maintained,” Bligh said.

New Climate Change Requirements for the Banking Regulator

Apart from the removal of cheques, Chalmers also announced an update to the Statement of Expectations for the Australian Prudential Regulation Authority (APRA).

The update provides details on how the government expects the agency to regulate financial institutes across the country in the coming periods.

One major change is the requirement for the APRA to consider climate change risks as part of its work, including promoting transparency regarding the adoption of climate reporting standards.

However, the government expected the APRA to be mindful of the size and business models of regulated entities due to the potential regulatory burden the reform could impose on small businesses.

“All of this will help to make sure we maintain a stable and robust financial system for you and your customers while also fostering competition and innovation in an evolving economic environment,” Chalmers said.

While the government has outlined plans to phase out cheques, it will continue to support access to cash and is not examining the findings of an investigation into bank branch closures in regional areas.

The Epoch Times has reached out to several major Australian banks for comment but has yet to receive a reply in time for publication.

Alfred Bui is an Australian reporter based in Melbourne and focuses on local and business news. He is a former small business owner and has two master’s degrees in business and business law. Contact him at [email protected].
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