Group warns against 'killing off' the cheque

The use of cheques as a form of payment is at least 350 years old in the UK, according to the organisation that manages their processing.

But while the Cheque & Credit Clearing Company is celebrating the anniversary, a business group is warning against plans to set a date for their abolition, citing a lack of 'viable alternatives' for small firms.

The Forum of Private Business (FPB) says that the Payments Council - which sets the strategy for payments in the UK - is preparing a roadmap in which it is likely to set a date for the demise of the cheque.

The FPB believes that the council will propose phasing cheques out by 2018. In an FPB survey conducted in November 2007, 62% of respondents said that the year would be a 'reasonable' date, but only if viable alternatives were in place.

The survey formed part of the group's response to the council's National Payments Plan Consultation, which closed earlier this month. The response called for small firms to have the same 'toolbox' for managing payments as larger businesses, and for the Direct Debit process to be more accessible and affordable.

"Even in a world filled with electronic telecommunications, many small businesses still rely on payment by cheque," said FPB chief executive Phil Orford.

"Holding back the planned phase-out until viable alternatives are in place, and until businesses and consumers decide it is time to withdraw the cheque-clearing service, would be the sensible approach."