Cheques to be phased out in Australia by 2030

Treasurer Jim Chalmers today outlined his plan for major reforms in the way payments are made which will focus on cashless and mobile financial transactions.

In a speech to the Australian Banking Association (ABA) in Sydney, he said Australia’s ageing payments infrastructure was holding back the country’s productivity levels.

Chalmers said phasing out cheques and introducing a more efficient New Payment Platform would put Australia on the path to a digital economy.

He also flagged an expanded role for the Reserve Bank of Australia on regulating payment systems, and a new payments licensing regime.

ABA chief executive Anna Bligh said the reforms will provide direction for the banks and payments industry’s investment in future technology.

“With cheques now in steady decline and accounting for only 0.2 per cent of all payments, it’s time to have a smooth and well-planned process to phase out this form of payment.

“Australian banks will work with the government to ensure that customers and businesses are ready for a gradual and orderly phase out.”

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A major reason behind the decline in cheques has been the costs to individuals and financial institutions.

Banks charge as much as $20 to issue a bank cheque and customers face processing fees for writing personal cheques.

Under the government plans, they will be phased out gradually.

After consulting with states, territories and industry and community groups, their use will cease by 2030.

The move will bring Australia in line with other major economies which no longer use cheques.