The Australian Payments Clearing Association has announced a plan of action for managing the decline of cheques in Australia’s payments system, including key measures to improve access to the digital economy.
The APCA, the payments industry self-regulatory body, says over the past decade cheque use in Australia has dropped by more than 60 per cent, in favour of more efficient electronic alternatives. APCA conducted the consultation to ensure that as cheques become scarcer and inevitably more difficult to use, community payment needs continue to be met
As a result, the APCA conducted a 12-month public consultation process, which has formed the basis of a report entitled The Decline of Cheques: Building a Bridge to the Digital Economy which concludes that, on current evidence, there is no need to consider closing Australia’s cheque system despite the irreversible decline of cheques.
Instead, Australian cheque providers and users can continue to make their own choices about replacing cheques with electronic alternatives. APCA concludes the market for payments is sufficiently flexible and responsive to user needs that providers can continue to offer cheque services as long as there is demand.
“We believe competitive forces will see providers and users make their own decisions about cheques,” APCA CEO Chris Hamilton says. “But as volumes continue to drop, cheques are likely to become a niche service. Our plan is designed to manage the transitional challenges that this will present.”
According to the Reserve Bank of Australia, the average cost of cheques to the community is estimated at $7.69 per cheque, compared to less than $1.21 for each electronic payment. Research commissioned by the APCA found that 75 per cent of Australians no longer use cheques, but five per cent of those surveyed said they would struggle to find an alternative to using cheques should they become obsolete.
APCA found that those groups of Australians most likely to be affected as cheques continue to decline are the aged, those living in rural and regional Australia and not-for-profit organisations. Access and usability issues that make it challenging for these groups to move away from cheques also make it difficult for them to share in the benefits of the emerging digital economy and the APCA says both the payments industry and Government can do more to make this easier.
“It is clear that the issues affecting cheque users can’t be viewed in isolation,” Hamilton argued. “Industry needs to work with policymakers and stakeholders to ensure our payments system enables access to the digital economy for all Australians.”
The APCA report’s recommends industry collaboration to enhance the payments system to support emerging payment products, deeper engagement with government and stakeholders to address existing barriers, and efforts to boost public awareness of the benefits of electronic alternatives, and how best to access these alternatives.
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