Australia to phase out checks by 2030

Bouncing them all – starting with government – but cash gets to stick around

Australia will phase out checks as a payment method by 2030, and the nation's government will stop issuing them two years earlier.

The death of checks was recommended in a Strategic Plan for Australia's Payments System, delivered on Wednesday and endorsed by treasurer Jim Chalmers in a speech announcing the decision the same day.

"We know that the usage of checks has been declining, with a 90 percent decline in volumes over the last ten years alone," Chalmers said, at an event run by the Australian Banking Association.

The plan states that 0.2 percent of non-cash payments in Australia are made with checks, and observes that as volumes decrease, the cost of handling them rises.

Chalmers joined the dots and pointed out that the demise of checks – or cheques if that's how you spell it – has come because "digital transactions are easier, cheaper, and more accessible. In fact, currently, 98 percent of retail checks could be serviced through internet or mobile banking. And 100 percent of those used in institutional and commercial settings."

"All this means that leaving checks in the system is an increasingly costly way of servicing a declining fraction of payments."

Australia's government will lead the way by reforming its own business processes that rely on checks by 2028.

The strategy document points out that checks "continue to be used by certain cohorts of the population, particularly older Australians and those living in regional or rural areas or with limited digital proficiency or connectivity." Charities, the document states, "take a large proportion of donations through checks from their donors."

But the Treasurer and the document he delivered both expressed confidence that Australia will survive the demise of checks – because its New Payments Platform (NPP) improves clearing between financial institutions and allows real-time peer-to-peer payments between accountholders using just an email address or phone number as an identifier.

For individual users, NPP transactions appear in their preferred banking apps within seconds – speed that has seen Australia's Reserve Bank ponder whether a central bank digital currency would improve on the platform.

The strategy does not, however, suggest cash should be phased out.

"Cash is still widely accepted as a means of payment by merchants, used as a store of value, and provides resilience to the payments system during outages where digital forms of money cannot be used," the document states. The Aussie government has therefore adopted a "she'll be right" philosophy and committed to ensuring ongoing access to cash.

But all checks in Australia will soon bounce. ®

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