The Bankwatch

Tracking the consumer evolution of financial services

Digital Money Blog: Death of the cheque

 Dave discusses an Alliance & Leicester Commercial Banks Cash Survey published recently.  Boots have given up on cheque’s, which is significant.  In Canada cheque’s were killed off in most retailers a long time ago, but in the US are still accepted. 

According to The Daily Telegraph, Boots is going to stop accepting cheque’s as they now account for only 2 in every 1,000 transactions. For our overseas readers, I should point out that Boots is a British institution, a high-street pharacy-cum-drugstore. I’m not sure, but I think the key statistic is that two-thirds of the UK population visit a branch of Boots every month. So when they say that cheques are history, others will surely follow (Shell petrol stations no longer take cheques either, so it’s not just Boots). That I can understand.

The only people I write cheques to are the kids schools, for trips and dinner money and that sort of thing (why they can’t get a Paypal account I’ve no idea) and our gardener.

Source: Digital Money Blog: Cash is still king

In Canada debit is prevalent, but just getting going in the US.  Interestingly the retailers in the survey prefer cash, then credit then debit, which sounds counter intuitive.

But why do retailers think that cash is cheaper? I wonder about these figures: it must cost Boots more than zero to count, bag, deposit, guard, store and transport cash. Perhaps it’s a function of size: the SME’s quoted in the Alliance & Leicester survey may regard administration and bookkeeping an unnecessary overhead when applied to cash and may perhaps sometimes skimp on the record-keeping, whereas Boots do not.

Another small stat … I haven’t seen this in writing, but apparently the largest user of cash in Canada is Tim Hortons coffee shops.  Their use exceeds all vendors, and banks.  Even if its not entirely true, its indicative of the development of a two tier system, and banks will not necessarily be synonymous with cash.

Relevance to Bankwatch:

This survey is typical (imho) of the noise to be expected while we go through the dissonance of change.  I see a cashless society being inevitable, for certain customer segments.  With products such as Cardis gaining mass acceptance, and those areas that debit is already embedded, its a simple shfit, much as credit is the premier payment vehicle for a certain affluent segment today.  A

 two tier system could exist for some time though, but the players representing the tiers may not be as obvious.


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Written by Colin Henderson

September 29, 2006 at 22:38

Posted in Debit cards, Payments

4 Responses

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  1. “but apparently the largest user of cash in Canada is Tim Hortons coffee shops”

    Can this really be true? How many shops do they have? What is their turnover?

    Dave Birch

    September 30, 2006 at 10:53

  2. Tim Hortons locations: 2,625 in Canada and 297 in the United States. And they are almost 100% cash. Turnover $1.6 bn +/-

    As I suggested this may be an internal urban myth, but certainly their volumes are up there.


    September 30, 2006 at 13:05

  3. I recently sent a Cdn cheque (US Funds) from RBC to a US vendor to pay for a service and the cheque was refused at the US bank citing post 911 security changes. Apparently recently implemented to prevent Cdn personal cheques from being used as a form of payment. I can find nothing to substantiate this other than word from our small local branch. IS THIS TRUE?


    October 7, 2008 at 20:51

  4. Thats a really weird response from your Bank. Lots of stuff going on, but not that!


    October 7, 2008 at 21:55

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