"Extreme worry" caused by plans to abolish cheques!

"The Salvation Army were the first to flag the depth of their concern to us: 89% of their donor appeal income comes through cheques"

PROPOSALS TO ABOLISH CHEQUES cheques by 2018, have caused "extreme worry" from significant proportions of the Voluntary and Community Sector according to a survey conducted by Civil Society Magazine and nfpSynergy.

In an online survey which garnered more than 640 responses, two out of five charity respondents rated their concern level about cheque abolition as ten-out-of-ten. A further third ranked their concern at the impact on their revenues as either eight or nine-out-of-ten.

Civil Society reports that at present, 40 per cent of charities say they earn between 80 and 100 per cent of their income from appeals from existing donors via cheque and a third get at least 90 per cent of their major donor income paid in by cheque.

Read more about this at Civil Society - Fundraiding News.

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Urgent: Survey on plans to abolish cheques

THE PARLIAMENTARY Treasury Select Committee has reopened its inquiry into plans to phase out cheques after being inundated by public concerns on the matter.

The proposal by the Payments Council (who speak on behalf of the major banks) to do away with cheques by 2018 has come about because cheque use has fallen by 40% in the UK since 2004. Electronic forms of payment, it is claimed, is cheaper saving both time and processing costs, the benefits of which can be passed onto customers.

Small businesses, charities and voluntary sector organisations fear that the move will be detrimental to them and increase the admin burden.

Civil Society Fundraising Magazine has joined with nfpSynergy to put together a quick survey to get a feel for how abolishing cheques might impact on charities. If you are a not-for-profit organisation and have 10 minutes to spare, then please Complete the Survey  by Wednesday 4th May at the very latest.

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Did you know... that cheques are to be abolished in 2018?

THE 31st OCTOBER 2018 is the date on which payment by cheque will end. Cheques, which have been used to make payments instead of cash for centuries, will cease to be used by the banking system from this date.

Cheque - a thing of the past?

Cheque use has fallen by 40% in the UK since 2004, although over 4 million of them are still issued everyday. But the payment method is considered outdated by the Payments Council who speak on behalf of the major banks and financial institutions. They see electronic forms of payment as cheaper saving both time and processing costs, the benefits of which can be passed onto customers.

However, the abolition of cheques may have a detrimental affect on small businesses and charities claims Yorkshire MP, David Ward. The MP has moved a Bill in Parliament to ensure that cheque facilities continue after 2018. The Federation of Small Businesses argue that cheques provide an easy-to-track audit trail, are easy to reconcile, require minimal administration, and they are convenient for customers. The abolition of cheques would increase the admin burden on small businesses.

Charities receive a significant proportion of their income via cheques. Whilst many major national charities will be able to adapt to electronic forms of payment, it is believed that smaller local charities reliant on volunteers will suffer.

Those who will find it hardest to adapt to a cheque-less society, are those who will be elderly in 2018. AGE UK believe that 64% of elderly people do not use the internet, and whilst that figure is expected to fall by 2018 there will still be a significant proportion who will revert to using cash for transactions rather than the internet. The fear is that elderly people start keeping large volumes of money in their houses. The 'cash under the mattress' becomes the pot from which to pay for day to day necessities and outside help. Elderly people then become targets for burglars and other criminals.

David Ward MP's Bill to prevent cheque abolition will be heard in Parliament in June 2011.

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