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Cheques going out of style
Published 8 April 2014 by Linzi Nuttall
Chip and PIN and online banking means that cheques are no longer the popular method of payment they once were.
As young people vote with their mobiles, it seems that cheques are increasingly making way for online banking and mobile apps as the current account features of choice.
A generation thing
Imagine you’re thinking of switching current account providers and to help you decide which one to pick you make a list of your priorities. Would having the ability to pay by cheque be on that list?
Chances are you answered ‘no’ – and you wouldn’t be the only one. Research* conducted on our behalf recently revealed that cheques are far from a priority for most of us. In fact, just one in five respondents revealed they would prioritise having a cheque book when choosing a new account provider.
However, cheques were found to be even less popular with young people than the population as a whole. Just 3% of 18 to 24-year-olds said they would like to have access to a cheque book, while only a tenth of 25 to 34-year-olds wanted one.
In comparison, more than a quarter of 18 to 24-year-olds said having a mobile banking app would be their priority, and more than three quarters wanted online banking. And among 25 to 34-year-olds the number of people demanding online banking is even higher, at 84%.
Rise of the machines
Plastic is probably the biggest reason for the decline in popularity of cheques. UK debit cards were introduced in the 1980s, in part, to give people an alternative to paying by cheque while out shopping.
Another reason why the cheque may have fallen out of favour is that chip and PIN has taken over. It’s 10 years since the technology was rolled out across the UK and since then it’s become rare to be asked to sign for something, as we’re more likely to be asked for our PIN number.
While debit cards and chip and PIN mean paying by cheque in store is less commonplace, it’s the increasing popularity of online and mobile banking that’s helped push cheques even further out of favour. Cheques were once used as a way of giving people we know cash, perhaps for a gift or because we were paying them for our share of something. Today, most people can simply log on to their bank account online and transfer the money at a click of a mouse.
Getting what you want
At thinkmoney, we’re careful to listen to our customers so we can build our budgeting accounts around their needs. That’s why our accounts, for which fees are payable, come with their own money manager service so that customers know cash is always budgeted to cover their bills.
It’s also why customers have the option of managing their money on the move using online banking through either our mobile or desktop site, while our SMS service keeps them up to date with their latest balance. And if our customers forget their PIN number, they can use our unique PIN by Text service to retrieve it.
It’s always worth researching what account providers offer and how the different features can benefit you. An account that works for you and does everything you want it to can make a big difference to your ability to manage your finances.
* Consumer Intelligence research carried out a survey of a representative sample of 2,202 UK adults from 31st July - 05th August 2013.