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Financial services
Payments & cheques – frequently asked questions
1. Why is the Payments Council looking to phase out cheques?
The use of cheques in the UK is falling rapidly, which is in turn has an impact on cheque acceptance. Phasing cheques out in a managed, coordinated fashion may prove to be the best way of responding to this trend. The alternative is that cheque acceptance continues to constrict, unplanned, and that banks decide to withdraw cheque facilities.
The Government believes that suitable alternative payment methods need to be developed. This is particularly important for the housebound, elderly, charities, schools and small businesses. The industry has taken responsibility to develop this thinking, and the Government continues to monitor progress.
The Payments Council is an industry body that oversees the UK’s payment systems. It has announced a provisional date of October 2018 for closing the cheque clearing system. However, going ahead with the phasing out of cheques will depend on whether suitable alternative payment methods are in place. A final decision will not be taken until 2016.
2. Why do processing times for cheques and card transactions vary?
The processing times for cheque payments depend on how a cheque is paid in and the rules specified by the banks involved. The bank or building society holding the account will be able to provide more information.
However, changes to reduce cheque clearing times were introduced in November 2007. On depositing a cheque, the recipient earns interest after two days, can withdraw funds after four days, and the cheque will not bounce after six days (unless the customer was a knowing party to fraud). More information is available on the Cheque and Credit Clearing Company website (opens in new browser window).
The processing times for card transactions depend on how a retailer chooses to organise their business, the technology they use and the arrangements they have with their bank.
3. How can I find a free-to-use cash machine?
The majority of cash machines in the UK make no charge for cash withdrawals when using a debit card or cash machine card.
If you are having difficulty finding a free-to-use cash machine, then you may wish to consider using the LINK locator service. This identifies local cash machines and the facilities they provide. The locator service is available on the Link website (opens in new browser window).
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