Australia is phasing out cheques by 2030, but banks are moving well ahead of the federal government’s timeline.
With less than 1 per cent of payments made this way, who will it affect?
Announcing the government’s plan last year, Treasurer Jim Chalmers said the shift would be “gradual, coordinated and inclusive”, adding that cheques were costly for banks to process.
Now Brisbane pensioner Michael Coogan will have to cover that cost.
Mr Coogan uses cheques to pay his rent.
When his bank stops processing cheques this week, he will have to pay a fee just to pay his rent.
Other banks will still process cheques for now, but the cost to do so starts at about $10.
“Of course, there will be people who use BPAY but I’m not comfortable with it,” Mr Coogan, who lives with his wife in Brisbane’s north, said.
“We don’t do any banking online because we’re not familiar enough with computers. Computers don’t figure largely in our lives.”
Cheque transactions make up just 0.2 per cent, according to a Reserve Bank of Australia (RBA) 2022 survey. The percentage of consumer payments by cheque were half that (0.1 per cent).
The use of cheques has dropped almost 90 per cent in the past decade, according to the Australian Banking Association (ABA).
The average cost for banks to process a cheque exceeds $5 and the Treasurer says it will only increase as fewer people use them.
In a consultation paper on “winding down” the country’s cheque system released last December, Dr Chalmers admitted that like many “productivity-boosting reforms”, the costs would be “felt more acutely by small segments of the population” – mostly more vulnerable Australians, and those without a reliable internet connection.
Still a “hasty or disorderly exit that leaves vulnerable cohorts of the community behind is in no-one’s interest”, he said.
The consultation closed this month, although some banks have already ended, or announced plans to end cheque services well ahead of the government’s timeline.
‘Don’t just support mortgage holders’
National Seniors Australia CEO Chris Grice said cheques were the “canary in the coal mine” for how a shift to a cashless economy will affect vulnerable people.
“Any society can embrace change but you’ve always got to bring everybody with you, and the concern is we’re leaving a cohort behind by racing towards this digital economy,” he said.
Mr Grice wants banks to reopen the branches they’ve closed so customers can get support in person to go digital.
“It would be good to see a number of banks across the country start to really look at their customers who have been customers for 40, 50, 60 years,” he said.
“The banks have got to really make sure that as a system they are providing support to the entire community, not just the cohort that have mortgages.”
In the six years to 2023, more than 1600 bank branches have closed and hundreds more regional ones are at risk, according to an analysis by AreaSearch.
National Seniors Australia will meet in Canberra today, with politicians including north Queensland MP Bob Katter, who made headlines after a federal parliament cafe refused to let him pay cash for his lunch earlier this month.
So where does that leave Mr Coogan and his wife?
They will now have to pay rent via a third party platform for about $8 a quarter.
He said it adds up for a couple on a fixed income.
“Every cent counts, and to all those 33-year-olds out there, one day you will be 53 and 63 and you’ll discover that your income shrinks, the ability to borrow evaporates, and your credit cards will be questioned,” Mr Coogan said.
Paying to pay rent
In laws to be passed by Queensland parliament this year, agents will have to provide a fee free way for tenants to pay.
Tasmania, South Australia, Victoria and New South Wales already have similar rules.
Tenants Queensland CEO Penny Carr said the end to cheques could push more renters onto the third party platforms, where there is a fee for their transactions.
“There are third party contracts where, in effect, the agents are subcontracting the rent payment and revenue collection requirements and also cost-shifting on to the tenant,” Ms Carr said.
“It just makes sense that you shouldn’t be charged for paying your rent.”
In a statement, the ABA said banks recognised a “very small number of customers” still used cheques and were “ready to support them to transition to other easier and more accessible forms of payments”.
“This support includes being up-front and transparent with customers about future policies around cheques, so they have sufficient notice to switch to other payment options,” a spokesperson said.
ABC Content Disclaimer
