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Paying for things by cheque has been possible for hundreds of years, but now it’s gone hi-tech

Staff writers, December 12, 2018 7:07PM Kids News

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A person writing out a cheque. Picture: iStock media_cameraA person writing out a cheque. Picture: iStock

money

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The old saying, “the cheque is in the mail*” is now “the cheque is on your phone” thanks to new banking technology.

Customers can now bank cheques using their smartphones as well as processing them at a bank branch, smart ATM or post office.

A cheque is a printed form on which you write an amount of money and who it is to be paid to. The cheque gives the bank permission to pay a specific amount of money from a person’s account to the person named on the cheque.

While the use of cheques is decreasing in Australia, Reserve Bank of Australia figures show more than 81 million cheques were written by individuals or businesses during 2017.

Westpac still receives more than 30,000 cheques every day and is continually looking for new ways to make banking simpler and easier for customers.

Westpac's new mobile app for depositing cheques. media_cameraWestpac’s new mobile app for depositing cheques.

This includes rolling out a new way to bank cheques by mobile phone. Eligible* customers can now use their Westpac mobile banking app to deposit* a cheque under $1000.

Westpac Consumer Bank chief executive George Frazis said the latest innovation added to a range of mobile app functionalities*.

“We’ve introduced our mobile cheque deposit feature to offer customers even more choice and convenience in how they do their banking.

“Eligible customers can simply upload a picture of the front and back of their cheque to the Westpac app and the cheque will usually clear and be in the chosen account within three business days,” he said.

New research from Westpac found almost half of Australians (41 per cent) still use cheques to make or receive payments.

However, figures from the Australian Payments Network — a group that ensures payment networks in Australia are safe, reliable and easy to use — found cheque use in Australia has fallen by 80 per cent over the past 10 years and continues decline at around 20 per cent annually*.

About 10 million people in Australia still write cheques to make or receive payments. media_cameraAbout 10 million people in Australia still write cheques to make or receive payments.

Australian Payments Network chief executive officer Dr Leila Fourie said customers were always looking for new choices and easy ways to make payments along with traditional methods.

“Older Australians are still most likely to use cheques, using them to pay for things like utility* and household bills, memberships and donations to charities,” she said.

“But people over 65 are also choosing to use cards and electronic payment options more often.

“Many people in Australia aged in their 30s would never have written a cheque and I think that generational change will continue to play a big part in the demise* of cheques.”

An oversized cheque which are common at presentation ceremonies. media_cameraAn oversized cheque which are common at presentation ceremonies.

ELEMENTS ON A CHEQUE

  • Drawer: the person or entity who makes the cheque
  • Payee: the recipient of the money
  • Drawee: the bank or other financial institution where the cheque can be presented for payment
  • Amount: the currency* amount

HISTORY OF THE CHEQUE

  • The ancient Romans are believed to have used an early form of cheque known as ‘praescriptiones’ in the 1st century (Before Common Era).
  • In 1717, the Bank of England pioneered the first use of a pre-printed form. These forms were printed on “cheque paper” to prevent fraud, and customers had to attend in person and get a numbered form from the banker. Once written, the cheque was brought back to the bank for settlement.
  • It is believed the Commercial Bank of Scotland was the first bank to personalise* its customers’ cheques in 1811, by printing the name of the account holder vertically along the left-hand edge.
  • Cheques became a highly popular non-cash method for making payments during the 20th Century and the use of cheques skyrocketed*. By the second half of the 20th Century, as cheque processing became automated*, billions of cheques were issued annually; these volumes peaked in or around the early 1990s.
  • Cash and cheques were virtually the only means of payment available to most Australians until bank credit cards were introduced a little over 20 years ago.

TYPES OF CHEQUES
Cheques are defined as:

  • Order cheques: the sum written on the cheque is paid to a specific person or entity (the payee) named in writing on the cheque.
  • Bearer cheques: the payment may be made to the person who holds the cheque (the bearer). In this case the payee’s name is followed by the words “or bearer”.

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GLOSSARY

  • the cheque’s in the mail: your payment is coming
  • eligible: having the right to do or receive something
  • deposit: a sum of money paid into a bank or account
  • functionalities: purpose that something is designed or expected to fulfil
  • annually: each year
  • utility: something useful to the home such as electricity, gas, water, internet and telephone
  • demise: death
  • currency: money
  • personalise: specific to one person
  • skyrocketed: increased quickly
  • automated: operated largely by automatic equipment

QUICK QUIZ

  1. How many cheques were written in Australia in 2017?
  2. Which group ensures payment networks in Australia are safe, reliable and easy to use?
  3.  Up to what amount of money can be deposited by cheque via the Westpac mobile app?
  4. Which type of people are most likely to use cheques?
  5.  In which year did the Bank of Scotland first personalise cheques?

CLASSROOM ACTIVITIES
1. Ways to pay
List all of the different ways that we can now pay for things. Next to each one, write down the BENEFITS and DISADVANTAGES of using it. You should think about things like how much it costs to use a particular way of paying, how easy it is to keep track of how much you spend, how safe it is to use and anything else you can think of.

Time: Allow 25 minutes
Curriculum Links: English, Economics and Business, Personal and Social Capability.

2. Extension
As you have read in the story, there have been many changes to the way that people paid for things over the past 20 years, especially with changing technology. What new technologies do you think we could be using in 20 years’ time? Use your imagination to write a detailed report.

Time: Allow 30 minutes.
Curriculum Links: English, Critical and Creative Thinking.

VCOP ACTIVITY
After reading the article, with a partner, highlight as many pieces of punctuation as you can find in green. Discuss how these are being used, where and how often. What level of the punctuation pyramid is the journalist using in this article?

HAVE YOUR SAY: Have you ever received money by cheque? Who from and what was it for?
No one-word answers. Use full sentences to explain your thinking.

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