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28 May 2021
Transcript: ABA CEO Anna Bligh spoke with ABC Adelaide’s Afternoons with Sonya Feldhoff about the dramatic drop in the use of cheques.
Sonya Feldhoff: A chequebook. Is that still something that you’ve got in your hot little hands, do you still like using a cheque, maybe a business who still gets a cheque every now and again? I must admit, even though I’m signed up to get money paid into my account with Medicare, I remember recently, after having gone to a specialist, I think receiving a cheque from Medicare, of all things.
I’m guessing you might be scratching your head like me, when you know that within a few days there will be another nail in the coffin of the cheque future.
Sonya Feldhoff: And where are we at on that front? Anna Bligh is chief executive officer of the Australian Banking Association and can hopefully help us out on that front. Hello, Anna.
Anna Bligh: Good afternoon. How are you?
There is absolutely no doubt the face of banking in this country is changing and it’s changing very, very quickly.ABA CEO Anna Bligh
Sonya Feldhoff: Yeah, well, thanks for joining us. Now, the ANZ has got a deadline coming next Monday where they won’t accept or allow cheques any more. How many organizations or banks actually do on this front?
Anna Bligh: Well, first of all, I should correct you. I’m sorry that there might have been some misinformation. The ANZ Bank will not be stopping cheques next week in Australia.
However, by stopping cheques in New Zealand, the Zealand banks started sometime in early 2020, led by their equivalent of the Reserve Bank here in Australia. And most New Zealand banks now do not offer or receive cheques here in Australia. However, while the cheque is in rapid decline, there is no Australian bank that is planning to cease offering this service.
So there’s no doubt that less and less Australians are using cheques, and less and less frequently – and at some point they may die a natural death, but at this stage, there is no planned date to see them out. But just to give you an indication, you know, 20 years ago, one in every five payments in Australia was made by cheque. Now it is zero point three per cent, less than one in 100 payments.
So, you know, customers are voting with their feet. They prefer to do it in ways that are much more convenient for them.
Sonya Feldhoff: Why is there a difference between Australia and New Zealand on this front, given that ANZ, particularly Australia, New Zealand Bank. I mean, is it just getting tougher on this?
Anna Bligh: It’s an interesting question. I think maybe some of these questions are cultural. You know, we’re not the same as New Zealanders, although we share much in common with them. But in New Zealand, it was a move led by their central bank.
It’s not exactly the same, but they’re equivalent of the Reserve Bank of Australia. And when the Reserve Bank there moved and said they weren’t going to issue cheques or accept cheques, other banks all lined up and did the same.
So and I understand from my colleagues in New Zealand that there was not a lot of concern or complaint or controversy about that move in New Zealand. But I think it is important to recognize that, you know, one of the differences here in Australia is, people live in much more far flung and remote places than most New Zealanders. And that might account for some of the techniques that we continue to see in Australia.
There is absolutely no doubt the face of banking in this country is changing and it’s changing very, very quickly. And interestingly, the pandemic has accelerated some of those trends. So last year, there was a 40 per cent drop in the use of cheques. Not surprising given we were in lockdown and people weren’t out buying a lot and they weren’t going to bank branches because they were mindful of the medical advice. But we haven’t seen a return to pre-pandemic levels yet. So those people who stopped using them last year don’t seem to be rushing back to use them.
The ANZ Bank will not be stopping cheques next week in Australia.ABA CEO Anna Bligh
Sonya Feldhoff: Anna Bligh, when it comes to the future of cheques, you’ve indicated it’s a very low number of people using them. There’s got to be a time limit on it, doesn’t there? Is that imposed simply by the numbers of people who have, you know, voted with their feet and stop using them? Or will it be the big organizations who say, well, when it’s just a trickle, it’s just not worth it anymore?
Anna Bligh: Well, I think it’ll be a combination of those things. It’ll become a trickle when people start voting with their feet or more precisely, their fingertips, which is where for most people now how banking is done. But the banks are very mindful that some of those people who are using cheques are probably don’t find it as easy to use the alternative payment methods, and that we have to be mindful of their needs to participate in the economy.
So the Australian government in a recent digital report found that 77 per cent of people aged over 65 reported doing their banking online. The National Seniors Survey found that only 10 per cent of people said that they actually cannot do online banking. What we do know is that for consumers over 65 personal cheques represented less than one per cent of their number of weekly payments, and that’s down from two per cent in 2007. So people might only use a cheque if they buy a second hand car or somebody, for example.
But the rest of the time, they’re using other methods of payments for their electricity bill or their telephone bills. So, you know, I think as we get into next year and the year after and we get to see a more accurate picture of what people are doing post-pandemic, as I’ve said, we’re not out of COVID yet.
We’ve certainly seen a very big drop off in cheques since COVID started. They haven’t bounced back yet and I’m not sure that it will, but we’ll certainly be watching for that.
“some of the biggest users of cheques in Australia and the biggest institutional users of cheques are government departments,”ABA CEO Anna Blihg
Sonya Feldhoff: You mentioned more remote locations as being perhaps one of the areas where people use cheques more frequently. And Stacey says she’s in Murray Bridge, which is a regional area here in South Australia. “We have many patients, especially farmers, who still use cheques at my work. They are always very thankful we still take them.” And I guess if you’re living in a regional or remote area where Internet access is perhaps sporadic or unreliable, and you also have the lack of banks, actual physical banks in some of those locations other than at long distances, your choices are getting a bit limited, aren’t they?
Anna Bligh: Well, I think it’s often just comes down to customer comfort and customer preference. For example, in the example you just gave, I would be very surprised if most of the customers at that medical service aren’t using their debit cards to make the payment and feeling very comfortable with that. But I think we know that one of the reasons some people like using cheques is for them. It’s a very helpful way they’re very used to of checking their expenditure.
You know, they go through their cheque stubs and that’s what they’ve always done and they feel very comfortable with that. There will come a time when I think there’ll be less and less people in that category. But I do want to assure your listeners that right now there is no plan in Australia to cease making cheques available.
For businesses I’m not aware of any legal obligation for a business to take a cheque, but I’d be very surprised that any business wouldn’t want to take cheques if that’s how the customers want it to pay.
Sonya Feldhoff: Anna Bligh, the Reserve Bank’s fairly keen, someone on our text line, points out that sending out cheques at various points and some mention the occasion where I had a Medicare cheque for a doctor to pass on or X-rays. Isn’t the example here that we really need to get the federal government and some of these organizations on board if this is the way of the future?
“I would hope and I would expect that that would be done with quite a long transition period, a bit like when we changed from analogue radio to digital”ABA CEO Anna Bligh
Anna Bligh: Well, I would say that I think while there is no plan in Australia at the moment to get rid of cheques, should that ever get we ever get to the point where, as you said before, such a small trickle that it really makes no sense to keep it going – I would hope and I would expect that that would be done with quite a long transition period, a bit like when we changed from analogue radio to digital. You know, people would know well in advance and make arrangements.
Anna Bligh: But you are right, some of the biggest users of cheques in Australia and the biggest institutional users of cheques are government departments, not all of them, but many of them. And I’m sure that many of your listeners would be able to give examples not only at the federal but at the state level. So it would be something that would have. To be planned and done carefully so that every organization that has, you know, any component of their payments in the cheques box should be able to make plans and and make sure nobody got caught out in any way.
Sonya Feldhoff: Anna Bligh, thank you for updating us on that situation.
“If you’re concerned you are being coerced or taken advantage of financially, I encourage you to contact your bank.” ABA CEO Anna Bligh
“Once conditions ease, it’s important for anyone impacted to know their bank is ready to provide assistance”