What We Can Learn from the Dying Days of the Cheque

Life used to be so simple. You could pay with cash, with a cheque or with a wire transfer. Today the number of payment options is big, and getting bigger, as ‘bank money’ fragments into a myriad of different products and payment rails. In addition, add in crypto currency, stablecoins and CBDCs. Where will it all end?

Digital payments, real-time transfers and mobile wallets mean cash use for transactions is changing, while cheques have already virtually died a death.

The Bank for International Settlements reports that the value of payments made by cheques fell from 15% in 2012 to 4% in 2021.

Factors often suggested to explain the decline in cheques are:

• The premium placed by consumers and merchants on speed, efficiency and convenience
• Cost
• Risk of crime
• Regulatory push.

The process of change

Cheques used to signify trust, formality and a personal touch in financial transactions.

By contrast, digital payments, while quick and convenient, are impersonal, but that has not stopped their rise.