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Payment by cheque


nightrider

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Lots of people and business's pay their bills by cheque and if the banks proposal to withdraw cheque book payments as a cost cutting exercise I think that the tax man will lose out.

if a private individual has to pay a local tradesman in cash the first thing they will say is, 'no VAT for cash' or I want 'a discount for cash'

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That won't worry the banks will it?

 

I thought bankers were firmly of the opinion (especially given the last year or so) that the tax system was there simply to supply income to the banks (and favoured bankers) when they have wrung all they can out of individuals (lol) >:-)

 

Graham

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knight of the road - 2009-12-27 2:34 PM

 

Lots of people and business's pay their bills by cheque and if the banks proposal to withdraw cheque book payments as a cost cutting exercise I think that the tax man will lose out.

if a private individual has to pay a local tradesman in cash the first thing they will say is, 'no VAT for cash' or I want 'a discount for cash'

 

They are not completely phased out until 2018, I think. Most retailers don't accept cheques now anyway. I would have thought it in the interest of all businesses to use the BAC's system as they get their money almost immediately. I am sure small businesses will invest in electronic fund transfer as I suspect customer will not be willing to carry large sums of money for bill paying. Lets hope I win the lottery before tey are phased out!

 

David

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Klyne - 2009-12-27 4:46 PM

They are not completely phased out until 2018, I think. Most retailers don't accept cheques now anyway. I would have thought it in the interest of all businesses to use the BAC's system as they get their money almost immediately. I am sure small businesses will invest in electronic fund transfer as I suspect customer will not be willing to carry large sums of money for bill paying. Lets hope I win the lottery before tey are phased out!

 

David

Not all small businesses are the same David.

 

We sell over the Internet (accepting payments using PayPal), by mail order (payments by cheque) and at family history fairs (payments by cash or cheque). BACS would be of no use at all to us at fairs.

 

Setting up a merchant agreement to enable us to take debit or credit cards would be an expensive burden which we would rather do without, certainly a lot more than PayPal fees cost us.

 

Phasing out of cheques has nothing at all to do with customer or retailer convenience and everything to do with cutting bank costs (= increasing bank profits).

 

Graham

 

Added in Edit:

Also, I sent my niece a few quid as a Christmas present - using a cheque. If cheques are phased out how will that be achieved in future? Tne banks just ignore that type of transaction don't they.

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GJH - 2009-12-27 6:48 PM

 

Klyne - 2009-12-27 4:46 PM

They are not completely phased out until 2018, I think. Most retailers don't accept cheques now anyway. I would have thought it in the interest of all businesses to use the BAC's system as they get their money almost immediately. I am sure small businesses will invest in electronic fund transfer as I suspect customer will not be willing to carry large sums of money for bill paying. Lets hope I win the lottery before tey are phased out!

 

David

Not all small businesses are the same David.

 

We sell over the Internet (accepting payments using PayPal), by mail order (payments by cheque) and at family history fairs (payments by cash or cheque). BACS would be of no use at all to us at fairs.

 

Setting up a merchant agreement to enable us to take debit or credit cards would be an expensive burden which we would rather do without, certainly a lot more than PayPal fees cost us.

 

Phasing out of cheques has nothing at all to do with customer or retailer convenience and everything to do with cutting bank costs (= increasing bank profits).

 

Graham

 

Added in Edit:

Also, I sent my niece a few quid as a Christmas present - using a cheque. If cheques are phased out how will that be achieved in future? Tne banks just ignore that type of transaction don't they.

 

Graham

 

I don't think I agree with you. Since the advent of electronic means of payment, debit/credit cards the number of cheques used has shrunk by an amazing degree. From a retailing point of view the cost of processing cheques is the reason why they are no longer accepted. Whilst I appreciate that Bankers have few friends these days the choice they face is to either stop accepting cheques or increase the cost of processing cheques putting them beyond the cost/benefit limit of most small businesses. Therefore forcing smaller businesses to use altenative means. I think it may be called progress. I never take my cheque book with me these days. If I wish to buy something I will pay by debit/credit card, perhaps cash for smaller amounts. If a seller is unwilling to accept the payment I wish to make then I will either not buy or go elsewhere.

 

David

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Klyne - 2009-12-27 7:19 PM

Graham

 

I don't think I agree with you. Since the advent of electronic means of payment, debit/credit cards the number of cheques used has shrunk by an amazing degree. From a retailing point of view the cost of processing cheques is the reason why they are no longer accepted. Whilst I appreciate that Bankers have few friends these days the choice they face is to either stop accepting cheques or increase the cost of processing cheques putting them beyond the cost/benefit limit of most small businesses. Therefore forcing smaller businesses to use altenative means. I think it may be called progress. I never take my cheque book with me these days. If I wish to buy something I will pay by debit/credit card, perhaps cash for smaller amounts. If a seller is unwilling to accept the payment I wish to make then I will either not buy or go elsewhere.

 

David

I understand your point of view David and I wouldn't try to persuade you to use cheques.

 

However, leaving aside the business aspect, what will people be expected to do as in my other example, small gifts between private individuals? Will we all be expected to supply our bank account details to all our friends and relatives so that they can use BACS?

 

Graham

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Hi.

 

I have a PayPal account, my wife doesn't. My wife's AOL address is linked to mine, but I don't know if that is relevent.

 

My PayPal account was 13p (thirteen pence) in credit. When our cedit/cheque cards have time expired, I have not updated the details with PayPal, cos my wife does not like the idea that somebody can take money from us without asking. So PayPal should not have access to neither our bank nor our credit cards. Occasionaly I sell something on Ebay to boost the PayPal account.

 

About a month ago, my wife bought something on-line, using HER credit card (Amazon), which PayPal had never been told about. Cost circa £40. She clicked SEND, and immediately got a message from PayPal saying the payment had been sent. HOW did PayPal get involved?

 

We immediately tried to contact the mail-order vendor ...... there was no contact address on his website. But eventually we got thru to him, and he said he had received payment, and goods were on their way. We are still uncertain whether we should be unhappy about this.

 

A couple of days after the event, my wife was talking to our bank about another matter, and happened to ask for an "off the record" opinion about PayPal. The lady at the bank said SHE had a PayPal account. Reassuring! But we are still reluctant to make a link between PP and the money in our bank. However, I guess the writing is on the wall.

 

PayPal is American, and we have learned not to trust American businesses. They play hardball according to different rules.

 

602

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W3526602 - 2009-12-28 8:03 AM

 

Hi.

 

I have a PayPal account, my wife doesn't. My wife's AOL address is linked to mine, but I don't know if that is relevent.

 

My PayPal account was 13p (thirteen pence) in credit. When our cedit/cheque cards have time expired, I have not updated the details with PayPal, cos my wife does not like the idea that somebody can take money from us without asking. So PayPal should not have access to neither our bank nor our credit cards. Occasionaly I sell something on Ebay to boost the PayPal account.

 

About a month ago, my wife bought something on-line, using HER credit card (Amazon), which PayPal had never been told about. Cost circa £40. She clicked SEND, and immediately got a message from PayPal saying the payment had been sent. HOW did PayPal get involved?

 

We immediately tried to contact the mail-order vendor ...... there was no contact address on his website. But eventually we got thru to him, and he said he had received payment, and goods were on their way. We are still uncertain whether we should be unhappy about this.

 

A couple of days after the event, my wife was talking to our bank about another matter, and happened to ask for an "off the record" opinion about PayPal. The lady at the bank said SHE had a PayPal account. Reassuring! But we are still reluctant to make a link between PP and the money in our bank. However, I guess the writing is on the wall.

 

PayPal is American, and we have learned not to trust American businesses. They play hardball according to different rules.

 

602

As a former Data Protection Officer I have a healthy distrust of all on-line financial institutions until such time as I can obtain reassurance. Whilst we have used our credit cards (and debit cards to a limited extent) on-line I have insufficient confidence in the banks and credit card companies to administer our main accounts using the Internet. Too many things can go wrong apart from security. Just think back to Northern Rock and how people could simply not access their money (even though it was safe) because the servers were overloaded.

 

I don't have any problems with PayPal though. Yes, the parent company is American but the company which operates in the UK is a Luxembourg based subsidiary subject to European law.

 

I would expect that the mail-order vendor from whom your wife purchased uses PayPal to process credit card payments (rather than having a merchant agreement) as we do, and that is how PayPal got involved.

 

One good thing, to me, about using PayPal is that the retailer never gets to know the credit/debit card details of the purchaser - which is added security if anything.

 

Graham

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The slow 'death' of the cheque is being organised by The Payments Council.

If you Google them you can find out more about what they are up to.

 

The intention is to phase out cheques by 31 Oct 2018, but ( it is said ) they will have to come up with easy-to-use alternatives before that time.

 

They say that they will review the situation in 2016 before making a final decision.

 

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We had just made the descision to never pay for Insurances again by debit card and only send cheques when we heard this announcement! and we will be very annoyed if the cheque,s are stopped.

 

Our latest experience was with Rias, when they took another years premium out of our account without our sayso! for House and Contents, we had already insured with another Company as we had decided that this year it was too expensive.

Yes we should have read the new quote better, but I was still under the opinion that they could not take anything more from our account without us giving permission :-S (not so) you have to ring them (which takes about 20 mins by the time they have put you through all the options))

 

We have just managed to get the full amount back which they did so by sending us a cheque!! they said they couldnt put the money back on our card!! funny that as they had no difficulty taking it!!

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Hi,

 

Another problem, particularly if you are travelling, is that the bank can, and do, stop a card payment, and then void your card. Why? Because they can?

 

They will say that the payment is suspicious. and I have to accept that they are often right. We have had a few phone calls at home, asking if we have just paid for a meal in Spain (for instance). We are grateful. But what happens if we ARE in Spain, and they cannot reach us by phone? Suddenly we don't have credit card facilities?

 

A cheque has the advantage that it canot be stolen electronically, and it takes time to clear.

 

I suspect that the banks make a profit from CC transactions, sufficient to more than compensate for fraudulent transactions. But if they can cut down on the frauds, then they will make even more profit.

 

Not so long ago, I paid for a meal by CC. I was amazed to see my PIN number appear on the paper printout. I suspect it formed part of the sum I was expected to pay, somebody hadn't pressed a button ?????? Whatever, the printout wasn't in my sight for very long.

 

602

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W3526602 - 2009-12-29 7:37 AM Hi, Another problem, particularly if you are travelling, is that the bank can, and do, stop a card payment, and then void your card. Why? Because they can?

Easiest way to avoid this if you intend using the card outside of your regular pattern, ie, outside of the UK, is to tell the credit/debit card company in advance that your card will be used in whichever country that you will be visiting.

This usually ensures that the bank does not apply a temporary stop on your card.

  

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Bazza454 - 2009-12-29 12:29 PM
W3526602 - 2009-12-29 7:37 AM Hi, Another problem, particularly if you are travelling, is that the bank can, and do, stop a card payment, and then void your card. Why? Because they can?

Easiest way to avoid this if you intend using the card outside of your regular pattern, ie, outside of the UK, is to tell the credit/debit card company in advance that your card will be used in whichever country that you will be visiting.

This usually ensures that the bank does not apply a temporary stop on your card.

  

Unfortunately that does not always work. If an attempted fraud takes place in the UK whilst you are away they will still put a stop on the card. Its happened twice to me now. Between us Margaret and I have 4 CC to use if necessary so we can usually get round it. What is a useful thing to do is to lodge details of your mobile phone with your card provider if they have that option. Tesco is my main card and they tend to ring you if there is a problem. Better to have it on the mobile than get the message when you get home several weeks later!David
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Bazza454 - 2009-12-29 12:29 PM

Easiest way to avoid this if you intend using the card outside of your regular pattern, ie, outside of the UK, is to tell the credit/debit card company in advance that your card will be used in whichever country that you will be visiting.

  

 

That's exactly what we do. :-D

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It is hard to see how they will come up with alternatives to the cheque that are not electronic.

Should we really have to rely on a supply of electricity to pay bills, or send your neice some money at Christmas.

The cheque has been in use successfully for 3 or 4 hundred years through wars and disasters. If it ain't broke it does it really need fixing ?

 

But then if it suits the banks I'm sure it will happen.

 

 

 

 

:-(

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malc d - 2009-12-29 2:03 PM

 

It is hard to see how they will come up with alternatives to the cheque that are not electronic.

Should we really have to rely on a supply of electricity to pay bills, or send your neice some money at Christmas.

The cheque has been in use successfully for 3 or 4 hundred years through wars and disasters. If it ain't broke it does it really need fixing ?

 

But then if it suits the banks I'm sure it will happen.

 

 

 

 

:-(

 

It seems that everyone wants to blame the banks but in this case I don't think they are the villians, if indeed there are any!

 

For retailers cheques are high risk compared to electronic means of payment. There is also a much higher cost in processing cheques. Fine if you are only processing a couple a day but large stores would process hundreds if not thousands. Once customers saw the benefit of paying by cards the cheque book was dumped in the drawer at home. Because of this cheques became an inconvience for larger retailers, many of whom have since stopped taking cheques. Given the drastic fall in the number of cheques processed how can you blame the Banks for calling a day on this sort of payment. My affairs are managed perfectly well by using credit cards, debit cards, standing orders, direct debits and direct payments via the internet. The only person likely to loose out because of the lack of cheques is the local Chinese Takeaway as he only takes cheques or cash. He will have to change.

 

David

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Hi,

 

A cheque is a written instruction from you, to your bank, telling them to give somebody some of your money. At one time, it could be written on anything. I have heard of a cheque being written on a pig, and being honoured. I have also heard of a contribution to a college "rag" being written on the belly of a lady wearing a bikini. A photograph appeared in the local newspaper, showing the lady being lifted onto the counter so the clerk could apply the necessary rubber stamp.

 

I wonder if that can still happen?

 

The bank hold your money, probably don't pay you any interest, and may soon start to charge you for the priviledge. And now they want to make it difficult for you to ask for your money. I have heard of something called a counter cheque (?) but have never met one. How do they work? And will they be phased out too? IE - if you lose your bit of plastic, you are going to starve?

 

My MiL once had the situation where the only way she could access her building society savings was by closing the account. This was sometime in the 1970s, and I don't know if the BS staff were exceeding their authority.

 

More recently, we drove from Swansea to Durham to buy a classic car. I checked the oil, it was low, so we went to the nerest garage, bought a couple of pints, paid by CC. Then I checked the brake fluid which was also low ...... paid by same CC. Then we drove our new car to garage, filled the petrol tank, presented the same CC. It was refused.

 

Luckily we had another card we could use........

 

602

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The Payments Council website itself says that 54% of the population still use cheques, and 3.8 million cheques were processed in the year 2008.

 

They also state that there are plenty of situations where cheques are used extensively; payments to small traders, clubs, charities, relatives etc.

 

Then they say " The decision has been taken in the interests of consumer and business cheque users".

 

But what are the benefits to consumers ?? They don't tell us that.

 

Our friend Klyne says he is quite happy to use cards, internet etc, and good luck to him - but there is no good reason that I can see why everyone else should do the same.

 

This is all about reducing costs/ extra profits for banks.

(Maybe they are just making provision just in case the taxpayers can't afford to keep up their level of bonuses ? ).

 

 

 

:-(

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Klyne - 2009-12-29 4:47 PM

 

malc d - 2009-12-29 2:03 PM

 

It is hard to see how they will come up with alternatives to the cheque that are not electronic.

Should we really have to rely on a supply of electricity to pay bills, or send your neice some money at Christmas.

The cheque has been in use successfully for 3 or 4 hundred years through wars and disasters. If it ain't broke it does it really need fixing ?

 

But then if it suits the banks I'm sure it will happen.

 

 

 

 

:-(

 

It seems that everyone wants to blame the banks but in this case I don't think they are the villians, if indeed there are any!

 

For retailers cheques are high risk compared to electronic means of payment. There is also a much higher cost in processing cheques. Fine if you are only processing a couple a day but large stores would process hundreds if not thousands. Once customers saw the benefit of paying by cards the cheque book was dumped in the drawer at home. Because of this cheques became an inconvience for larger retailers, many of whom have since stopped taking cheques. Given the drastic fall in the number of cheques processed how can you blame the Banks for calling a day on this sort of payment. My affairs are managed perfectly well by using credit cards, debit cards, standing orders, direct debits and direct payments via the internet. The only person likely to loose out because of the lack of cheques is the local Chinese Takeaway as he only takes cheques or cash. He will have to change.

 

David

 

 

 

David

If we cut this down to something everyone can understand then it may be harder for the banks to justify their stance.

 

You have a grocery store and you sell cigarettes as well, you make almost no profit on cigarettes because lots of people have stopped smoking but many still are and so you still sell quiet a lot of them, less than you did but still lots because the customers that do buy them come into your store for them and purchase other products too.

Now because you are not a monopoly "unlike the SPIV banks" do you stop selling your cigarettes and loose the customers that buy them and other products too.

 

No !! you wouldn't because many of your customers want cigarettes and you need their custom and that is what is called " convenience of the customer" rather than "conveinience of the SPIVS"

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