As the world is progressing alternative trends are making old systems faster and more convenient. The finance sector isn’t behind at all when it comes to these trends. Digital innovation is one such trend that has made finance so much more efficient and costumer-friendly. For example: cheques.
These age old payment methods are now being replaced by something better, before we find what has replaced them lets read up on cheques first:
Cheques: A cheque is a document which orders the bank to pay a specific amount from a person’s account to another person in whose name it has been issued.
Chequebook: A cheque book is a set of blank cheques offered by a bank.
The 2 main types of cheque in India are:
- Bearer cheque: When the word ‘bearer’ printed on the cheque is not cancelled, the cheque is called a bearer cheque. This can be encashed by any person who gives the cheque to the bank. However such cheques are risky because if they are lost, it’s finder can collect the money from the bank.
- Crossed cheque: A cheque that has been marked to specify an instruction about the way it is to be redeemed is a crossed cheque. A common instruction is to specify that it must be deposited directly into the bank account of the person to whom it is issued and not immediately cashed over the counter. A crossed cheque has 2 parallel lines on the left corner of the cheque which says that it cannot be given to the bearer of the cheque.
Crimes like forgery, embezzlement and identity theft are likely to be committed through cheque transactions. Hacking into a person’s bank account details and balance, issuing cheques in his/her name, false signatures on cheques are some types of frauds committed with the use of cheques.
#1. But Cheques have become so last season, here’s why:
- Cheques are paper-based which makes it expensive for most banks to carry out these transactions.
- They are time consuming
- They are more prone to frauds and theft
- If you’re being paid via checks on a regular basis, you’ll also be making trips to the bank on a regular basis.
#2. Net-Banking is the New Cheque:
Net and mobile banking have made payments more convenient. These are apps and websites of banks using which consumers can carry out transactions like payment of loan premiums and purchases via the internet. This is one of biggest alternative for cheques as one does not have to go to the bank for depositing cheques and it’s done on the internet itself. Apart from that digital wallets like Paytm can also be installed for making transactions.
In addition to net banking and digital wallets, ATMs have also made accessing money at any hour from anywhere simple.
#3. The cheque rein is almost over in some places:
Despite it being in use for over 350 years cheques have been totally phased out in Netherlands and it is has become rare in countries like Belgium, Germany, Switzerland and Sweden since 2016.
#4. But the cheque still has a few loyal fans:
Few older people and charitable companies and trusts still prefer cheques or cash as they are not comfortable with new technology. Cyber security is a main concern for people to switch to digital modes of payments. Once the system has become more stronger, cheques might be phased out completely.
Read what some of the fans from Britain have got to say: The joy of cheques: six reasons why they’re better than online banking
So the next time you get a cheque or write one, make sure you capture the moment because it probably might be your last time!