The Payments Council, which is responsible for setting a strategy for UK payments, has set out a time frame for withdrawing the guarantee scheme for cheques.
According to the body, the decline of guaranteed cheque use continues to accelerate, falling by a third between 2007 and 2008.
A full stakeholder review and detailed research has led the Council to believe that the scheme is in “terminal decline” and the earliest date for withdrawal has therefore been set at mid-2011.
The Council points out that consumers will still be able to write cheques and businesses can continue to accept them even after the scheme’s withdrawal.
Last year, of the 1,400 million cheque transactions, just under 7% were supported by a cheque guarantee card and although around four million consumers still guaranteed cheques regularly, in many cases the guarantee function is not an essential part of the transaction.
Over 99% of the 59.9 million cheque guarantee cards in issue are also either debit or credit cards; the vast majority being debit cards which provide an alternative means of payment, the Council says.