RDP 2020-06: Consumer Payment Behaviour in Australia: Evidence from the 2019 Consumer Payments Survey 7. Cheques

The 2019 CPS provided further evidence of the long-term decline in the cheque system, with personal cheques accounting for only 0.2 per cent of the number of payments made during the week of the survey. While this was a similar share to that recorded in 2016, it was down from 1.2 per cent in 2007 and confirmed that personal cheques are seldom used to make consumer payments. In the few cases where they are used, personal cheques tend to be used for relatively large consumer expenditures such as household bills and services. Accordingly, cheque payments had a higher median value ($111) than cash ($12) or card (\$26) payments.

As in previous surveys, the use of cheques was heavily concentrated among older Australians. Indeed, all of the personal cheque payments recorded in the 2019 CPS were by respondents aged over 50, with 80 per cent of them made by people aged over 65. Nevertheless, for consumers aged over 65, personal cheques represented less than 1 per cent of their number of weekly payments, down from about 2 per cent in 2007, often for household bills (Figure 28). Despite not recording any cheque payments in the week of the diary, around 5 per cent of respondents aged under 50 had made at least one cheque payment in the previous year (Figure 29). Overall, 13 per cent of respondents reported having made a cheque payment at some point in the previous year. Consumers who reported using cheques typically said they did so infrequently, although 10 per cent of respondents aged over 65 indicated that they used cheques every few weeks or more often.

Because cheques are not used very often by most consumers, it will likely be appropriate at some point that the industry winds up the cheque system given the high per-transaction cost of cheque payments (e.g. Bullock 2020). However, it will be important that alternative payment methods are available and accessible for those who currently are continuing to use cheques. In this regard, the CPS indicated that the majority of cheque users do so out of a preference for cheques for some payments, although some respondents attributed their use of cheques to not having access to an alternative means of payment or that the receiver only took cheques (Figure 30).