Charges for cheques a possibility

More than half (53%) of 16 to 24 year olds never write cheques and a further 33% write cheques less than once a month, a survey by Defaqto has found.

The leading financial research company’s findings reinforce earlier research by the Association for Payment Clearing Services (APACS), which found that cheque volumes dropped 8% in 2006.

Defaqto’s David Black, Principal Consultant – Banking, believes that card culture is slowly killing off the humble cheque. He says: “We’ve already seen a number of high profile retailers announcing that they will no longer accept cheques and, as the survey has revealed, the future for the cheque is looking bleak with the younger generation increasingly turning their backs on them.”

Black suggests that the future fate of the cheque could be further compounded following the Office of Fair Trading’s investigation into the personal current account market.

Black, who authored Defaqto’s market report Current Accounts 2007: The storm before the calm, says: “Given that the Office of Fair Trading is currently investigating the personal current account market, my expectation is that cheques will be near the front of the queue when providers search for alternative income streams. Cheques are relatively costly for providers to process and, in the not too distant future, people who write them are likely to be charged for the privilege of doing so.”