The Cheque Guarantee Card Scheme to close 30 June 2011

Today the 24 bank and building society members of the UK Domestic Cheque Guarantee Card Scheme have announced that the Scheme will close on 30th June 2011, meaning that it will no longer be possible to guarantee a cheque under the Scheme after this date.

The decision to close the Scheme was taken by the Payments Council in June this year as guaranteed cheque use is in terminal decline. The Payments Council concluded that it was in all parties' interests to manage the Scheme's demise in a coordinated fashion following extensive consultation with guaranteed cheque users and acceptors. This announcement does not mean the end of cheques as businesses will continue to be able to accept them and customers will still be able to write them.

During the next two years, those banks and building societies who provide cheque guarantee services will ensure businesses who still accept guaranteed cheques, and personal customers who still write them, are made aware of the closure date, and that they are given information about the alternatives.

To help answer likely questions that businesses or consumers may have on this issue the Scheme has today published two fact sheets available from ukpayments.org.uk.

The first guaranteed cheque was written in 1965, and the industry-wide Scheme was established in 1969, before many of us had a plastic card, and at a time when cheques were our main non-cash method of payment. The Scheme's initial guarantee limit 40 years ago was £30; today there are three limits of £50, £100 and £250. Since 1 October 1990, the common identifier on all cards with cheque guarantee functionality has been William Shakespeare, and his image is used within the cheque guarantee hologram or logo on all cheque guarantee cards.

Of the 1.4 billion cheques written last year only 95 million (7%) were guaranteed. This represents a decline of one-third on the previous year and a fall of 70% in the number of guaranteed cheques over the past five years. This decline has been driven by many retailers, petrol stations and similar outlets taking a decision to no longer accept cheques. No major UK-wide supermarket chain now accepts cheques. As some major retailers stopped accepting cheques part way through 2008, a further 25% fall is forecast for 2009, and it is expected that the rapid decline will continue: by 2011 guaranteed cheque volumes are forecast to be only half 2008 levels.

Jacqui Tribe, Manager of the UK Domestic Cheque Guarantee Card Scheme says: "Now an industry-wide date has been set we can look to support customers through the change by providing information on what this will mean. The alternative was to let the Scheme wither on the vine - which was more likely to have led to confusion, mixed messages and potentially exposing more customers to the risk of fraud."