Will cheques become a relic of the past?

As a small or medium enterprise (SME) owner, there's a good chance you use cheques to pay a number of business expenses, from real estate costs to fees for your insurance coverage. However, trends show that the practice of writing out a cheque and sending it off may become a thing of the past, eventually becoming a story you might tell your grandkids to impress them with how old you are.

According to research from the Australian Payments Clearing Association (APCA), businesses are one of the biggest cheque users, joined by older generations.

In 2011, the APCA analysed cheque usage within the country, finding that only 30 per cent of customers who had a personal cheque account had actually written one in the previous year. The largest group of these were over 60 years old, with only 7 per cent of those between the ages of 18 and 30 using the paper method.

This trend has only continued to develop since then. The APCA's yearly payment transactions statistics showed that cheque volume per day has decreased steadily over the past two decades, sinking from 3.7 million to 0.7 million.

As such, the APCA expects cheque usage to die out altogether eventually - though that's most likely still years away.

"Often when people say when the cheque is the convenient option, they aren't aware of the other options," said Chris Hamilton, APCA CEO, according to the Australian Associated Press in an October 23 article. He expects cheques to be "a rarity" in four years.

What does this information mean to you in the meantime? In addition to recognising that some of the companies you do business with might not accept cheques anymore, you might also want to consider embracing electronic payments from your customers - if you haven't already. This is all the more important given that a July 2014 APCA report found cash is also falling out of favour.

With fewer people carrying cash and cheques with them on a regular basis, consumers are beginning to expect options to pay with their cards wherever they go.