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If you live in the UK, your paper checkbook is going to die a slow and lonely death. The check clearing system, similar to the Federal Reserve Clearing House in the United States, is going be phased out over the next decade and will close for business in October, 2018.
Ultimately, this seems like a good step for the international banking system. There is no use to waste the time and cost for companies and banks to process paper checks. The recent laws in the United States that require digital check images be treated as a paper check was the first step here, in my humble opinion.
I work in the payment processing side of a very large company, and it would save us a lot of money, which could mean lower rates for our customers, if we only had to deal with .03 ACH transactions or cheaper EDI (electronic data interchange) rather than the much more expensive paper checks.
I am check free (no relation to the payment processor) for everything except my rent, and I am switching that over to bill pay this month. I will not have to write a paper check on a regular basis ever again.
So, would the United States follow suit in the near future? I am not sure if we can expect a ten year turn around period, but I bet we go paperless in the next twenty. It could save lots of trees and lots of hassle.
What do you think? Are paper checks as dead as Vanilla Ice’s career, or will they stage a comeback? Please give your thoughts and opinions in the comments.
Hat tip to the Mint.com blog for this topic.
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