Cheques Phased Out by 2018
The announcement earlier this year by the Payments Council to begin the process of phasing out cheques by 31st October 2018, has brought payment methods for all businesses into sharp focus, prompting a new era for business transactions. Now is the time for businesses to seriously consider payment alternatives in order to be sufficiently prepared ahead of the proposed deadline. The eight year timeframe for the phasing out of cheques is more than adequate to allow businesses to research and adopt new solutions in order to make the switchover an easy and painless process.
For some organisations the removal of the cheque will be seen as a significant movement ultimately changing the way they have operated for years. However, the benefits of incorporating new electronic payment technologies must be embraced. With cheques synonymous to longer clearing times – making a potential late payment even later – and exacerbating cash flow issues, businesses can realise the potential of services such as Direct Debits (DDs) and Faster Payments in facilitating automated payments that improve cash flow whilst saving time, cost and resource.
The Payments Council’s announcement is set to be a catalyst for yet further changes and improvements to the B2B payments process. Take for example the potential introduction of B2B Direct Debits that should include new rules to allow SMEs to originate DDs. If this is introduced by 2012, five years ahead of the target deadline, this will fully enable all organisations to implement payment alternatives which are more cost-effective than handling cheques.
Replacing cheques with faster, more secure and less administrative, DDs and/or Faster Payments can only be a positive step forward for businesses, whether handling B2B or B2C transactions. With the future promising payment methods via mobile phones and the likes of pre-paid contactless cards, early adoption of payment solutions that facilitate electronic transactions will ultimately ensure a head start and competitive edge for businesses that thrive on customer service and streamlined, easy payment processes for their customers.
Albany Software is a market-leading developer of Bacs and Faster Payments compliant funds transfer solutions, with over 10,000 customers currently experiencing the benefits of its products.
