LONDON: Senior MPs have accused the banking industry of engineering a "fudged" decline of cheques without considering the impact on users.
MPs on the Treasury select committee were told that many small businesses could lose out following the Payment Council's plans to end the use of cheques by 2018.
In December 2009, the board of the UK Payments Council announced that cheques will be phased out by October 2018, but only if alternatives are developed. The Council stated that it had decided to set the date for proposed abolition so far in advance to encourage the development of other forms of payment.
The select committee's chair, John McFall, said it was "beyond belief" that cheques were in terminal decline, adding that it was really a "fudged, managed decline" on the part of the Payments Council and the industry.
He pointed out that cheques were used to make payments worth £1.4tr in 2008, and were still the second largest payment type after automated credits. Even if cheque usage declined by 40% between now and 2018, he said, there would still be about 600bn written every year.