Cash or checks? Or Cheque?

Can you imagine a bank that doesn’t issue out checkbooks to its clients? Well, by 2018, checks will be jurassic, at least in Great Britain. The Board of the UK Payment Council has announced that the check clearing system will clear its last check on October 31, 2018.

Again, technology has pushed a traditional mode of payment into the history books. The use of debit cards, credit cards, and other forms of electronic payment systems (EPS) has grown in popularity. Salaries are often debited directly into one’s bank account. UST has stopped using checks to pay salaries of its professors. Now, the money goes straight into one’s Security Bank account, conveniently located within the campus. Gosh, I just encashed one check earlier at Security Bank.

According to the UK Payment Council, fewer people are using checks as mode of payment in that country. From 10.9 million checks in the 90s, only 3.8 million checks were paid out daily in Britain. Countries like Sweden and Norway have phased out the use of checks in their financial systems.

Locally, according to the PCHC, it processes a daily average of 682,915 Integrated and Inter-regional clearing items with annual count of 337,384,486 physical inward and outward checks. That includes our Security Bank check payments for our condo. The PCHC is the only clearing house in the Philippines.

Noel Barcena says, “Next to cash, checks are instruments most used for payments. PCHC primary role is to provide and maintain an efficient, economical and effective medium of exchange of cheques and other electronic payment items amongst its member banks.” Noel is the VP for Operations of PCHC. He provided me with insights about PCHC and BCPs (business continuity plans) as part of a feature story on business continuity for the Philippine Business Magazine.

There is some concern that if checks are eventually phased out as a form of payment, the older segment of the population who are not like BayanTel’s Lola Techie could be easier targets for thieves. Why? The elder people could be keeping large amount of cash at their homes.

It is generally believed that the Romans used an early form of check called “praescriptiones” during the 1st century BC. Banks in Persia, were also known to have issued letters of credit known as “Ṣakks.”

Did you know that checks during the 1600s were exchanged in coffee houses?

Now, I have to keep those old Far East And Trust Company (FEBTC) and Urban Bank checks I have. They could become rare memorabilia twenty years from now! I hope the BSP doesn't move towards a check-less society as checks are still a convenient and hassle-free mode of payment.