Written evidence submitted by the Institute
Many people, particularly the elderly, disabled
and houseboundstill rely on cheques as a means of payment.
Almost four million cheques are written in the UK every day.
Many believe that this is merely a way in which
banks can engage in a further cost-cutting exercise and a way
of cutting their services to the public. Whilst 2016, when the
Payments Council is due to review its decision, seems a long way
off, it is important to ensure that the issue doesn't get sidelined
as a result of the seemingly long time lineit will be on
us before we know it.
One of our fears has been that some banks will
use the Payment Council announcement as an excuse to jump the
gun and begin phasing out cheques now. This is what happened in
Belgium, and our fears are somewhat justified by the following
example, submitted to us by a small hospice:
"I had a call from one of my lottery members
who is having difficulty setting up her standing order. When she
contacted her bank (Santander) to find out if they had received
the form, she also asked for a new cheque book as hers was running
out, only to be told that they were already phasing out cheque
books, and she needs to do her transactions on line. When she
mentioned that she was 88 and didn't have a computer, she was
asked to find a relative or friend that had one to do it for her/with
her! She eventually managed to get a cheque book out of them,
but couldn't believe the lengths they were going to so that, as
they said to her, they didn't have to process so many things".
In general terms, large national charities with
the facilities and infrastructure to operate other methods may
cope better (although even they have concerns in terms of discouraging
payment by cheque), but small/local organisations are likely to
The Institute has received a large number of
responses from both large national charities who are among the
Top 20, down to smaller organisations (for example local hospices,
many of whom are extremely worried by the proposals).
The following are examples we have received:
Abbeyfieldcharity with a relatively
small donor database, a majority of their donors are in their
70s and 80s. Their October warm mailing raised around £31,000,
with £14,300 being received from 408 cheques. They say they
will certainly be hit by the phasing out of cheques. Whilst change
is inevitable and younger generations will embrace it, particularly
through online giving, for older people in particular, changing
their giving patterns will be a challenge. Most of Abbeyfield's
supporters don't have computers, so would not donate online and
it's also unlikely that they would switch to credit card.
Martin House Hospice for Children and Young
Peoplealmost 50% (£2 million) of their entire
income comes through donations made by cheque payments, so it
would have a huge negative impact on the charity if this method
of making donations were to be abolished without thorough consultation
and ensuring that alternative methods were in place and working
well for everyone.
National Deaf Childrens Society91%
of their cash payments come in by cheque and about 5% from Debit/Credit
cards. They have an elderly cash donor profile, which skews this
in favour of cheques. It is likely that older people would either
struggle to or opt not to use a card for this kind of payment.
Radio 4 Appeals70% of the donations
are made by cheque.
NSPCCcheques make up only 1 or
2% of donations and they prefer to receive donations by other
methods, eg direct debit or standing order. However, they don't
want do see cheques phased out, because it would be wrong to discourage
any particular method of givingif some people cannot give
in a particular way, they won't give at all.
Fight for Sightwhich funds research
into the prevention and treatment of blindness and eye disease.over
50% of their voluntary income last year was donated by cheque.
One in six people over 65 is affected by sight loss and not surprisingly,
the majority of their supporters are elderly people. These supporters
rely on cheques as their main form of payment. Many are unable
to make donations by other means or indeed do not trust the security
of other means. The charity fears the cost implications, given
the current higher charges associated with credit card and on-line
Cancer Research UKaround 90% of
the one-off donations given to CRUK offline by their supporters
are made by cheque. The vast majority of their legacy income is
also paid in the form of cheques.
Katharine House Hospice, Staffordlast
year received £600k by cheque. They offer other forms of
payment for most of their initiatives, but those supporters who
currently pay by cheque opt not to use methods such as online
and credit card, and it is highly unlikely that the charity would
be able to convert them to other methods of payment in the future.
Delta Disability Social Groupreceive
90% of their money by cheque. Members who have a disability and
cannot always get to a bank (rural members) always pay by cheque.
Aid to the Church in Needis a long
established charity; its supporter file has an older profilesupporters
tend to join them form the age of 50+, with longer-standing supporters
now in their 70s and 80s. 80% of their donations are sent in by
cheque, and their supporters have already said that they are unwilling
to use other methods and to reveal their bank card details, and
if they cannot pay by cheque, they will stop giving. Many of this
organisation's supporters do not use or have access to the website.
The Institute has also been advised that cheques
are vital for small parish councils who pay small amounts out
to suppliers on a monthly basis.
What about the donor? Quite apart from those
without access to the internet and/or older supporters who won't
opt to pay by other methods, it would seem that some donors have
a greater "feel good" factor when paying by cheque rather
than pressing a button, also that they have more control over
their money and don't have to give financial details online, which
is of concern to many people who do not like putting their bank
details on the internet.
It's interesting to note that 6.4 million people
over the age of 65 have never used the internet.
The voluntary sector needs to be fully engaged
with the Payments Council in terms of looking at possible alternatives
and evaluating their viability. What alternatives are being proposed?
Will they work? How much will they cost? At present there are
few alternative ways to give for those who are not used to managing
their money online, and it is important to seek solutions which
work for everyone and which do not exclude vital giving groups
and which do not discriminate against the elderly and disabled
donors. This seems to be somewhat of a generational issue, so
2018 may just be too soonmaybe a later end date could be
Direct Debit has been put forward as an alternative;
however, it is only available to a small handful of major (mainly
national) charities, as you need to have an income of over £5
million a year going through. This rules out a vast swathe of
charities, as only 1% of registered charities have more total
income than this (and that ignores unregistered charities, churches
etc). Even if the banks could be persuaded to lower this limit
to say £1 million per annum, it would make very little difference
to the vast majority of charities. It should be remembered that
most donations (by volume, not value) are processed by small charities,
mainly using volunteers.