We report on the options.

They have long been considered an outdated form of payment, but when the Payments Council announced that cheques were going to be phased out by 2018, there was a surge of support for the paper transaction method.

The result has been a stay of execution for the cheque. In July this year, the Payments Council, which overseas payments strategy, announced that cheques will continue for ‘as long as customers need them’ and that the target for possible closure of cheque clearing was cancelled.

The Council says the decision was made after a two-year consultation period that attracted more than 600 responses and found that cheques should continue because the public and businesses were concerned that there was no alternative payment method in place before the phase-out.

But despite the policy reversal, which coincided with the closure of the domestic Cheque Guarantee Card Scheme – a system whereby a plastic card that was used with a cheque acted as a guarantee that the amount will be paid – some retailers and businesses have lost confidence in accepting them.

Adrian Stafford-Jones, managing director at Hampshire electronic payment provider Albany Software, says that while the decision is the correct one for consumers, the concept of companies continuing to use cheques for business transactions is ‘archaic’.

He continues, ‘In today’s economic climate, every organisation needs to run a tight ship and ensure costs are kept to a minimum, yet the physical cost of issuing cheques is more than ten times that of sending an electronic transfer.’

Brian Goodhand, director at Manchester-based food business Adesso Foods, agrees that in the age of contactless payment systems, cheques may seem a little outdated. But he says, ‘We, as a business will continue to use and support cheques where we can and I do not feel that we stand alone in this.

‘Larger businesses naturally have bigger budgets so buying and accessing technology is not such a major concern. However, for the smaller business, both the initial outlay of electronic payment methods and ongoing costs associated with them are major considerations.

‘It may also sound rather old fashioned, and I’m sure rather naive to some, but many smaller businesses operate on a trust basis.

‘For example, a speciality food business such as ours will sell at events like farmers’ markets and trade generally with other smaller businesses. Many people still expect to pay by cheque and there remains that rather nice element of trust in dealings. It is almost a community spirit.’

Charlie Mullins, managing director of Pimlico Plumbers, adds that taking away the cheque was ‘always nonsensical’.

He says, ‘Despite the widespread use of debit and credit cards, there was no safe way of paying bills by post, or method to pay someone like a tradesperson, unless he had a portable card-reading machine or accepted cash.’