
BBC News - Cheques to be phased out in 2018 - wglb
http://news.bbc.co.uk/2/hi/business/8414341.stm
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mseebach
Electronic Cheques should be easy to implement in an online banking
infrastructure.

The debitor logs in and creates a new cheque. Amount, "pay to the order of",
"for" and expiry-date are filled out as well as an e-mail address for the
creditor. Perhaps also a password.

The bank emails the creditor saying that there's a cheque for him, tells him
to click the link. He's prompted for the password, and asked to provide the
account for the money to be transferred into. Once he confirms, a regular bank
transfer is set up, and at the same time the recipient gets a confirmation
that there is coverage for the cheque.

The final check could be that the debitor bank queries the creditor bank to
confirm that the account is in the name of the creditor.

This procedure allows you to "cut a check" in advance for a business meeting.
The e-mail arriving is like putting the money in escrow. When you sign the
contract, you give the creditor the password, and that completes the
transaction. If not, just wait for the expiry-date and the money is out of
escrow.

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qw
That sounds extremely complicated. I don't see the need to emulate checks
electronically, when there are good solutions today.

Scandinavian business and personal users have no problems with transferring
money using online banks. You can even get the invoice electronically and just
click a button to pay it, and the amount will be automatically transferred at
the due date. I have heard rumors that checks are sometimes used in B2B, but I
expect it to be in a very limited set of cases.

I remember some old people who used checks in the stores when I was a kid
(many, many years ago), but I doubt the stores would even know what to do with
a check if they were given one.

Edit: I did a search and found an article from 2006. The newspaper suggested
that people should have a check book in case of problems with the electronic
system (many don't carry much in cash). They interviewed the CEO of a major
bank, and he wasn't even sure that the bank gave out check books at all :-)

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mseebach
Large sum transactions with low level of pre-established trust still don't
have a replacement for a check. I bought a used car from a small dealership.
The dealer didn't have the resources to check my credit, and I didn't trust
him enough to just wire money to him ahead of time. Also, there's no way I'm
going anywhere, especially not in the kind of neighbourhoods that have small
used car dealerships, with enough cash to buy a car on me.

So I went to my bank and got them to make a check in my name for a ridiculous
fee, and brought that, and figured, "why can't I just do that online"?

Another purpose would be quick settlements of bills. If I transfer the money
it takes up to three working days for the amount to appear in the creditors
account -- sometimes that's not practical if I need someone to ship something
to me today -- this electronic check would solve that problem, because the
creditor would be informed immediately by a trusted party that the money is
there and on the way.

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furyg3
I'm from the US, never really liked checks, and then moved to Holland (where
they simply do not exist) and was amazed.

You have 4 ways to pay for things:

* Transfer from your online banking. You need the other party's account number, their name, and city. It's free for both parties; instantaneous (money is no longer available to your account, and is immediately available to the other party); can't be done if you don't have a high enough balance (no bounced checks); and can be set to be recurring. It makes the US checks/fees/delays look like a joke, but doesn't provide 10 different revenue streams for the banks.

* You can use your debit card (called _pinnen_ or 'PIN-ing') at any stores that have a scanner. There are no fees, you have to enter your pin. Most places (supermarkets, restaurants) will let you PIN, but don't take credit cards. Like transferring money, charges are immediate, done in the order they are received, and don't go through if there's not enough money.

* All debit cards have a little smart chip on them, which can be used to 'ChipKnip'. You load small amounts of money directly onto your chip, and you can now use your card to pay for small things (parking meters, printers at a university, etc). It's insecure (no PIN required) and if you loose your card the money's gone. It also (I think...) doesn't require a live connection to the ATM network, so transactions can be run later

* Giro. Giro is the opposite of a check (it's a credit-transfer instead of a debt-transfer). Sometimes bills are sent with a GIRO slip, which the payer fills out and eventually makes it way to the payer's bank, where a transfer is initiated to the recipient. I've never used a GIRO in the 2+ years I've been here.

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tptacek
They mean personal checks, right? Because businesses still use checks all the
time, despite being more sophisticated users of money than consumers.

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ErrantX
nope, as far as I am aware (my parents use them a lot in their business so
they have a particular interest) it's all cheques.

~~~
tptacek
It's hard to believe that business checks are going to be phased out in a
world where Morgan Stanley takes $9Bn in funding in the form of a paper check.

For small businesses, it's also hard to see how you replace the value of being
able to fedex a check to a new vendor. Online payment works in places where
both companies are established and have a relationship, and less well
elsewhere.

I know this is UK and not US, but is there something I'm missing about how
business works in the UK?

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pelle
The US is about the only place where people are scared to give out bank
account details and that is because in theory you could initiate an ACH bank
transfer from the other parties account. What many people don't understand is
that that same information is on a check.

In most of mainland Europe everyone pays everyone through online banking. In
Denmark people put their account details on their web sites and letterheads.

There is really reason why you couldn't do the same here even with first time
vendors. Except that some banks make it really hard to do.

My old bank Wellsfargo had me sign up for something called I think DirectPay
where you could do it easily. But my new bank CitiBank make it just as easy as
in Europe from both my personal and business accounts to send money.

This love afair of checks that American business has is all about float and
frankly I am incredibly annoyed that all my clients insist on paying me by
check.

~~~
anApple
It's required by law in the EU to put your bank account details on the web if
you run a company.

~~~
Luc
Maybe. I guess it's possible there's a EU guideline that has to be implemented
by the member states, but hasn't been implemented yet e.g. for me in Belgium.

Here's the guidelines (in Dutch): <http://www.vbo-
feb.be/files/ondernemingsnummer.pdf>

So the website needs to contain the company registration number, the way it's
incorporated and a bunch of other stuff, but not the bank account number
afaics. Though the bank account number does need to be displayed on invoices.

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mattmanser
I don't get it, according to the figures in 2017 we'll be down to 300 million
cheques a year, which is roughly 4 cheques per year per person in the UK.

That's still a pretty high number in my book given that a lot of them will be
for large money amounts.

~~~
axod
Most of them are students paying for drinks at the bar by cheque. Will not be
missed.

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Raphael
Sauce?

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trezor
I'm over 30 and I have never owned a checkbook. Checks are backwards, insecure
and prone to abuse with no real guarantee for whoever gets one that he will
actually get money, which makes them even more worthless.

If I were a bank I would do everything in my power to get rid of checks
pronto.

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s3graham
You're clearly not from North America then. :(

Not that I disagree with ditching them, of course.

~~~
gasull
Indeed. I never owned a checkbook until I moved to the US. Why does everybody
love them here?

~~~
Raphael
It's a convenient way to give a person more money than you carry in cash. No
one I know has a personal card reader they carry around (yet).

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anApple
Cheques should be reintroduced in Europe so that the US. can't ocpy all the
transactions as it does right now with SWIFT.

