19th Sep 2016

Should banks remove their headphone jack?

Just like Apple has brushed the headphone jack under the carpet with the release of the iPhone 7, should banks look to eliminate old-fashioned cheques from their dusty shelves?

When Steve Jobs pulled the CD drive-less MacBook Air out of a brown paper envelope in 2008, he accurately predicted that internet-based software would soon replace the faithful disc.

In the same style; when Apple Marketing Chief Phil Schille took to the stage in San Francisco for the release of the iPhone 7, he described the 3.5mm headphone jack as a 19th century component standing in the way of 21st century technology.

So here’s a question for you:

Should banks eliminate cheques as a payments service?

Well, they nearly did…

In 2009, the UK Payments Council set a target date of 31st October 2018 for the closure of the central cheque clearing system, which would have effectively abolished payments by cheque.

Following public outcry, MPs and ministers intervened and the plan was abandoned. With the UK Payments Council announcing on 12 July 2011 that they would continue “for as long as customers need them”.

So cheques are here to stay, but for how long?

Appealing to people with traditional payment preferences, they continue to be used as a form of payment – with over 500 million still being written in 2015.

While this figure seems astronomical, cheque payments decreased by 13% in 2015.

To bring them into the 21st century, some banks (such as Barclays) have introduced a cheque imaging service, which allows people to pay in by taking a photo of the cheque on their smartphone.

Is Cheque Imaging satisfying a stopgap?

Did You Know? Following the passing of The Small Business, Enterprise and Employment Bill on 26th March 2015, all banks will be expected to process cheques as images from October 2017.

Just as Apple’s Lightning to Headphone Jack Adapter is filling a gap for those reluctant to let go of headphones, it seems Cheque Imaging  is serving much the same purpose in the banking industry. That is, until such a point where they are no longer deemed a viable method of payment.

Tell us what you think?

We’d like to hear your opinion. Tell us what you think the banks should do by answering the three questions below.