Shopping staple to vanish forever


The written cheque was once a fundamental avenue for account transactions but it may be reserved for the novelty variety given to lucky lottery winners after its use declined sharply again in 2019.

Reserve Bank Governor Philip Lowe said on Tuesday the days were numbered for the payment system, while the use of cash was also making way for electronic payments.

He said the number of cheques written over the past year had fallen by 19 per cent while the value written through this form of transaction dropped 30 per cent.

The use of cheque payments fell sharply again. Graph: RBA
The use of cheque payments fell sharply again. Graph: RBA


Dr Lowe told the Australian Payments Network Summit in Sydney this morning the continued drop was also due to the real estate sector making electronic payments available.

"At some point it will be appropriate to wind up the cheque system, and that point is getting closer," he said.

"Before this happens, though, it is important that alternative payment methods are available for those who rely on cheques."

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Australians are also abandoning the use of cash, with 80 per cent of retail transactions now tap-and-go.

This continued shift in payment preference is attributed to the willingness of consumers to evolve with the introduction of technology by adopting options such as tapping from a mobile phone or smart watch.


Electronic payments are readily available through various options. Graph: RBA
Electronic payments are readily available through various options. Graph: RBA


"As expected, there has been a further trend decline in the use of cash, with cash now accounting for just around a quarter of day-to-day transactions, and most of these are for small-value payments," Dr Lowe told the summit.

"Given the other innovations that I just spoke about, I expect that this trend will continue."


Dr Lowe says the use of cash and cheques continues to fall. Picture: Mick Tsikas/AAP
Dr Lowe says the use of cash and cheques continues to fall. Picture: Mick Tsikas/AAP



Dr Lowe has called out Australia's major banks for consistently charging customers more for international money transfers than their non-bank rivals.

The RBA has found that the big banks' average currency mark-up over the wholesale exchange rate was about 5.5 per cent, compared to about 1 per cent for digital money transfer services.

Dr Lowe says customers often cop extra fees and, citing the findings of a consumer watchdog inquiry, don't know where the quoted rate was in relation to the wholesale rate or how much they would receive from the transaction.

"The costs here are still too high and the payments are still too hard to make," Dr Lowe told the summit this morning. "It is important that we address this."

An exercise by RBA staff involving more than 70 international transfers from Australia showed the major banks were more expensive on all but two occasions. The spread between the bank rates and those of their smaller rivals was widest for transfers to Fiji, Samoa and Tonga, and Dr Lowe said "people are being served poorly by existing arrangements".

"Many people in the South Pacific rely on receiving remittances from family and friends in Australia and New Zealand," Dr Lowe said.

"In many cases, low-income people are paying very high fees and it is important that we address this where we can."

Dr Lowe said inefficiencies in the traditional banking system were partly to blame for the slowness and high cost of some international transfers.

With Westpac facing costly legal action over its failure to properly monitor international payments potentially linked to child abuse, Dr Lowe said the challenge to the big banks was "to offer better service at a lower cost to their customers, while still meeting their AML/CTF (anti-money laundering and counter- terrorism funding) requirements."

Dr Lowe also reiterated his disappointment at the pace at which major banks - most notably Commonwealth Bank - have moved to access functionality of the new payments platform infrastructure that allows speedy transfers using PayIDs such as email addresses or phone numbers.

He said that sluggishness had a knock on effect across the wider financial industry.

"Payment systems are networks, and participants need to know that others will be ready to receive payments and use the network," Dr Lowe said. "Some banks have been reluctant to commit time and funding to support the development of new functionality given that others have been slow to roll out their 'day one' functionality."

- With AAP's Stuart Condie

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