Aussie payments to change forever

Cashing cheques is set to become a thing of the past after the Treasurer Jim Chalmers signed the death warrant for the paper-based payment.

The decision will see cheques phased out by the end of the decade under reforms to modernise the nation’s payment system.

Dr Chalmers will use a speech to the Australian Banking Association in Sydney to argue the existing system is “clunky, inefficient and cumbersome to maintain”.

“Our regulatory frameworks and infrastructure have not kept up with the big trends and transitions happening in finance, especially when it comes to the digital economy and payments,” he will say.

The use of cheques has fallen by 90 per cent over the past ten years. At the height of its use in the early 1980s, cheques accounted for 85 per cent of the number of non-cash payments.

Dr Chalmers said a transition to digital will help “Australians get their money faster”.

“Currently, 98 per cent of retail cheques could be serviced through internet or mobile banking and 100 per cent of those used in institutional and commercial settings,” he will say.

“Leaving cheques in the system is an increasingly costly way of servicing a declining fraction of payments.”

The government plans to wind down its use of cheques by 2028 and will remove legislative requirements for their use, before it calls time on the payment by 2030.

Dr Chalmers said consultation with states and territories, industry and community organisations will take place before the end of the year.

Finland eliminated cheques in 1993. Across the ditch, New Zealand stopped processing cheques in 2021.

While cheques have fallen out of favour, Dr Chalmers assured access to cash is safe.

The government will support the Bank@Post network which provides access to banking in 1,800 locations in rural and remote areas.

Dr Chalmers will also use the address to outline plans to widen the Reserve Bank of Australia’s mandate to cover all participants in the payment system – including digital wallet providers.