Bank cheques will cease to be issued from 2025

The Albanese government has suggested that it will phase out cheques in five stages starting from 2025.

As announced earlier this year, the government is working to phase out cashier’s cheques and bring in a “modern, competitive, and efficient financial system that delivers good outcomes for the Australian people and the economy”.

Noting that transactions are shifting from in-person to online methods of payment – and highlighting that there has been an almost 90 per cent decline in the use of cheques in the past 10 years – the cost of processing cheques has increased.

Given that many financial institutions have started reducing or withdrawing their cheque offerings as demand drops and as many retailers and service providers no longer accept cheques, the government is moving to wind down the cheques system by no later than 2030.

Treasurer Jim Chalmers has now released a consultation paper on the government’s proposed plan, which includes the “potential staged transition plan” for mothballing cheques.

The staged approach aims to support those who continue to rely on cheques and reduce as many adverse impacts as possible.

The government is proposing that, in 2025, cheques would cease to be issued by banks; followed by the ceasing of issuance of commercial cheques by businesses; and government issuance of cheques in 2026. This would be followed by ending issuance of personal cheques in 2027; then the cessation of acceptance of personal, commercial, and government cheques from consumers by the end of 2028.

The acceptance of bank cheques would then occur by the end of 2030, after which the cheques system would be closed.

The government added that it proposes six key conditions to be upheld:

• Sufficient grace period for consumers and businesses to make necessary adjustments to transition to alternate payment methods.
• Education and support for cheque users by financial institutions, industry associations, and consumer groups.
• Reasonable access to bank branches or participating Bank@Post outlets during the transition period to assist with education.
• Appropriate alternatives for all existing users of cheques.
• Governments eliminating key legislative barriers.
• Governments ending their own cheque issuance.

The consultation on the winding down of cheques is open until 2 February 2024.

Speaking of the consultation, Mr Chalmers commented that feedback would “determine the best path forward so that adverse impacts to consumers and businesses are minimised”.

He said: “We are making meaningful changes that will help make our payments system more seamless, safer and stronger, and suitable for the times.

“Whether it’s cheques, payment cards, digital wallets, or cash, a competitive and efficient payments system is essential to support the business of everyday Australians…

“The government proposes a staged transition that ensures all Australians are adequately supported and can benefit from a more efficient and safe payments system.

“Our government remains committed to maintaining access to cash throughout Australia.

“We are working towards a world‑class and efficient payments system that is safe, trusted, and accessible and enables greater competition, innovation, and productivity.”

[Related: Cheques out: Cheques to bounce by 2030]