The cheque will still be in the mail
Small and medium-sized businesses write almost half the cheques issued in New Zealand each year, says a new report, prompting a business lobby to call for banks to pass on the savings they make from phasing cheques out.
A report by accounting firm Ernst and Young for payment industry body Payments NZ described a broad group writing a relatively small number of cheques per year.
Personal cheque writers were more likely to be rural people and people in their early 60s.
Payments NZ declined to release more than snippets, chief executive Steve Nichols saying the full report contained rejected recommendations for phasing out cheques and commercially sensitive bank information.
Those surveyed said they used cheques out of habit, convenience and to control the time of payment. Some did not trust online banking or lacked computer access.
Some charities and organisations said they wanted as wide a group as possible to be able to make payments to them, including older people, who use cheques much more often than average.
Nichols said there were no plans to set a date to end cheques because their use was continuing to fall naturally, about 10 per cent a year since 2004.
"There are certainly no plans to intervene with that decline," he said.
Kim Campbell, of the Employers and Manufacturers Association, said small businesses sometimes used cheques to control cashflow, writing them as bills fell due and withholding postage until there was sufficient money in the account.
"For small guys - hairdressers and panelbeaters and the like - often they feel more comfortable writing cheques because they feel in control," he said.
It was up to businesses to insist that banks passed on any savings they made by phasing out cheques, which cost more to process than electronic payments, he said.
"We don't care if people pay by carrier pigeon but we are concerned about transaction costs."
SMEs wrote 48 per cent of cheques and large government, insurance, retail, and utilities bodies wrote another 7 per cent, the study found. The rest were written by private individuals.
People in rural areas made just as many electronic payments as people in urban areas.
But they wrote 15 per cent more cheques as well.
Cheque use increased with age, but the vast majority of cheque users also used eftpos, credit or online banking with just 7 per cent of accounts relying solely on cheques.
Five banks provided data showing accounts that issue or accept cheques for the study. Representatives from about 40 organisations were interviewed.
In Britain, public opposition quashed an attempt to place a deadline on cheques. Lobby group Consumer NZ has urged the payments industry to ensure people who need to use cheques can keep doing so.
Cheques – who's using them?
Rural people write 15 per cent more cheques than urban people.
rganisations write 56 per cent of cheques and individuals write 44 per cent.
People over 65 write nearly 18 per cent of cheques and use more cheques a year on average than younger people. The top 100 cheque issuers are mostly organisations that make a large number of irregular payments, including government agencies and insurance, retail, and utilities companies. Small and medium enterprises write 48 per cent of all cheques.
Three quarters of individuals using cheques wrote fewer than 25 a year and half wrote less than 10.
Eftpos accounts for 56 per cent of all payments by cheque users, credit cards 12 per cent and cheques 11 per cent. Seven per cent of cheque users are wholly reliant on cheques.
Source: Payments NZ