Once upon a time, not that long ago, all of us used cheques. These days, anyone under age 25 may never have actually written a cheque with anything other than “void” written on it, in order to set up automatic payments or payroll deposits.
Over the past ten years, our laptop and debit card have taken transactions by cheques from 50% of all banking, to less than 10%. It’s convenient, it’s instant, it’s the norm, and it’s certainly becoming more and more common. At the same time, debit cards have gone from non-existent, to 50% of all banking over the last two decades or so.
Who still uses cheques? An Interac survey last year found that 80% of people over age 50 still do. On the other hand, anyone twenty-something probably doesn’t even know that there was a time when the only way to pay for stuff was cash or cheque. You’ve got better odds of asking them what a record player is, than to imagine a life without debit cards or on-line bill payment.
Banks are certainly glad that we’re getting off cheque payments. Millions of cheques had to be batched daily through a clearing centre. Then they had to be sent to each individual branch, where someone had to verify the signature and file each cheque by customer, in order to return all of them with the monthly statement. It cost the banks a ton of labour and money. And it’s also why merchants agreed to give up 2 or 3% of their revenue to discount fees on credit cards, in order to avoid having to take the chance on cheques being any good a week or so after a sale.
As someone who loves it when people only spend money they actually have, I’m very proud of us Canadians, who are the 2nd highest users of debit cards in the world, right after Sweden. Why? Because debit cards have you spend money out of your account, and not on credit cards which create debt. I just hope that it’s real money we’re spending when we’re using our debit cards, and NOT with an overdraft attached to the account. If not, as we talked about a few months ago, that’s like taking on a very expensive and permanent debt.
Yes, we were told years ago that we’d become a cashless society – and that’s coming to pass. But I hope we fight Visa and MasterCard, whose mission is for us to be without cash, but WITH their credit cards.
But the best thing about the slow death of cheques is that your head will no longer explode when someone ahead of you in a store wants to pay by cheque and you’ll be spending the whole night in the lineup behind them.