Fees could be the nail in the coffin of the humble checkbook



“Let me write you a check …” may soon become a phrase of the past.

It used to be everywhere. There was a checkbook hidden in every desk or purse and woe to the unfortunate ones who didn’t register a withdrawal or deposit.

Electronic banking has put an end to much of that, and some commentators say the days of the check are numbered now.

In a recent blog post, William Cairns and Tony Lockie of General Finance said phasing out checks is pretty much a given.

Massey University banking expert David Tripe: Not surprised if checks disappear in 15 years.


Massey University banking expert David Tripe: Not surprised if checks disappear in 15 years.

Banks were unlikely to set a date for not accepting them. but would likely impose a hefty processing fee, maybe $ 25, each time a check was cashed.

READ MORE: Bank mediator warns against fake bank checks

“This will soon stop their use. “

However, banks say there are no plans to phase out checks stealthily.

Stefan Herrick, a spokesperson for ANZ, said checks remain a small but important “casual” payment tool for certain customer groups, namely those over 65 and small businesses.

All of his bank’s accounts still allowed checks, and the check activity fee was $ 3 or less.

Karen Scott-Howman, CEO of the Banker Association, agreed that the checks would likely still be with us for a while.

“Most people who still use checks use them as a second or third payment option,” she said.

“There wouldn’t be a lot of people who just rely on checks for payments.”

While checks might not be on death’s door, their fees ensure they’re used sparingly. They cost anywhere from $ 1 to deposit or cash a check and $ 3 to $ 10 for a bank check.

It can already cost up to $ 25 to stop a check or make a special request like faster clearance.

However, online banking and EFTPOS are now so popular that the use of checks has declined dramatically.

The Kiwis now make 51 electronic payments, by credit or debit card for each check issued, compared to 18 electronic or card payments five years earlier.

However, the check always seems to have its place when it comes to large sums of money.

“For example, if you are going to buy a new car or want to make major purchases, people usually don’t have a high enough limit for their online banking services,” said David Tripe, University banking expert. Massey.

“These are big one-off transactions, these are complicated things to do otherwise.”

This is probably why the average value of a check last year was $ 2,200, while the average credit card transaction was $ 80 and debit card transactions were on average $ 38.

The last heavy users of checks appear to be midsize businesses.

Tripe said small businesses can change relatively easily, big ones have to, but midsize businesses are often the slowest to revamp their payment systems.

And this was to continue as long as banks continued to charge less for check processing than it cost them.

“There are going to be some wealthy seniors who are still using checks and it’s a question of whether you’re willing to bite the bullet and say, no, we’re going to charge you properly for using those checks.”

Tripe said he wouldn’t be surprised if the checks disappeared in 15 years.

“But the social disruption of their sudden and dramatic removal would be quite significant.

“Unless something emerges that indicates control is the best way to do something, I think systems and processes will be designed so that there isn’t much of a role for them.”


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