The very, very last days of the cheque?

The world has gone digital. Consumers demand online and mobile solutions to their problems and businesses increasingly use paperless processes. Yet the old paper cheque is still relied upon by a surprising number of businesses; a throwback to a past of very different working capital strategies.

" Cheques simply put are a slow and inefficient payment method for any organisation to track and seek value in the 21st century."
Richard Haigh, Head of Australia Payments and Cash Management Products, Global Transaction Banking, ANZ

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At a glance

  • In Australia, monthly cheque volumes have dropped over 70 per cent between 2002 and 2014.
  • Adoption of new digital payment methods will differentiate the efficient from the inefficient options, such as cheques.
  • It is only a matter of time before paper cheques are obsolete, to be replaced by cards and electronic payment methods.
  • Cheques are prone to fraud and are difficult to manage, track and reconcile.

The statistics are compelling. In Australia, monthly cheque volumes dropped over 70 per cent between 2002 and 2014 and continue to decline at a vertiginous rate year on year due to the availability of a range of electronic payment alternatives. It's not surprising the financial industry sees them as obsolete.

Yet the cheque's resilience tells us, for some businesses, the paper financial order still fills a need. Indeed, nascent moves just a few years back to shift banking to a post-cheque world met with a strident public backlash, putting the plans on the back burner.

The Australian Payments Council recognises the need to offer sustainable payment options and include a transition path for cheques. It has established an industry working group to prepare a payments roadmap.

ANZ is part of this working group, which aims to deliver this industry roadmap by 2018.


Over the last 10 years, cheque usage has declined significantly in Australia and continues to decline at a steady annual rate. Cheques now account for less than 5 per cent of all non-cash payments made by consumers and businesses each day.

The decline is due to the availability of electronic payment channels (such as electronic funds transfers, BPAY, direct debit and direct credit) which all provide more convenient, secure, efficient and cheaper ways of transacting.

Cheques are prone to fraud and make it harder for businesses to manage cash flow and management. Electronic channels allow more effective payment processing and cash-management visibility.


It is clear electronic payment methods will continue to replace paper-based payment methods over time. Cheques no longer meet customer needs in a rapidly growing real-time payment environment, where digital wallets and mobile contactless payment technologies are now commonplace.

With the planned introduction of the New Payments Platform (NPP), the Reserve Bank-sponsored, real-time payments infrastructure now under construction, there will be a new faster, flexible and more convenient 24/7 electronic payment service to make and receive payments in Australia. This will further increase the decline of cheque usage.

The NPP, due to be released in Australia late 2017, is an industry wide initiative to deliver a new platform for Australia's low value-payments and provide Australian businesses and consumers with a fast, versatile, data-rich payments system for making their everyday payments.

Cheques will still be around for the time being but you will find it harder and harder to use them, with many businesses no longer accepting cheques as a form of payment. There's never been a better time for businesses to prepare for the rapid growth of the digital economy.


SuperChoice is a market-leading superannuation and pensions e-commerce company which provides cloud-based superannuation management to employers. The company's vision is to completely automate superannuation transaction and information processing in order to save costs and enhance customer service.

As a result of its growing business, there was a need to evaluate SuperChoice's available payment options for employers and members. Whilst all payments products were used, the company was keen to drive adoption of electronic payments to reduce costs, reduce errors, improve timeliness and provide enhanced service to their customers.

SuperChoice was facing challenges which we at ANZ were able to help resolve. For example, cheques being lost in the post would impact a large number of employers and members and the process of cancelling and resubmitting these was time consuming.

ANZ worked closely with SuperChoice to design an industry leading end to end payables solution which provided a range of electronic payment options, including EFTs (electronic funds transfer) and off-system BSB (branch identification) capabilities.

The solution ensured SuperChoice's urgent requirements for the immediate provision of all payment trails, plus transparency and traceability of payments, was met. It also delivered the strongest possible audit trails for matching payments to beneficiaries which was a key requirement.

Of course, some businesses still using cheques do so out of necessity because they have limited options for additional payment and invoice data or simply because cheques are a tried, tested and trusted method for customers and employees.

But staff involved in the production and distribution of cheques could be better utilised across these business to focus on value-added activities. This could drive revenue and bottom lines, providing efficiencies and costs savings business.

These businesses have an opportunity to devise a strategy to reduce their reliance on cheques and move into the future of payments.

Richard Haigh is Head of Australia Payments and Cash Management Products, Global Transaction Banking at ANZ.

The views and opinions expressed in this communication are those of the author and may not necessarily state or reflect those of ANZ.

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