CONSUMER MARKET RESEARCH INTO USE OF CHEQUES CONSUMER MARKET RESEARCH

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1 CONSUMER MARKET RESEARCH INTO USE OF CHEQUES 2017 CONSUMER MARKET RESEARCH

2 OVERVIEW For over 350 years cheques have been a trusted and secure way of making payments. Each year millions of consumers up and down the country use cheques to pay for goods and services. According to latest industry statistics, around 400 million cheques were written in 2017 the majority of them by consumers. Over the past decade we have been looking at consumers attitudes to cheques. We have looked at what they use cheques for, how frequently they either write or receive cheques, as well as looking at how they actually pay cheques into their bank accounts. As the new image-based cheque clearing system begins to roll out, it is important to us at the Cheque and Credit Clearing Company to understand fully what impact the speeding up of the cheque processing system will have on the millions of consumers who use cheques on a daily basis. The ongoing market research has not only helped us shape the new cheque imaging clearing process itself, but has also highlighted a number of interesting facts about how consumers view and use cheques. There is little doubt that cheques are seen as a trusted and very safe payment method. According to our research, over half of consumers (55%) had either made or received a payment by cheque in the last year. When we asked consumers why they write cheques the most popular reasons were either to pay a bill by post (23%), or to pay for services in the home (20%) - such as cleaners or tradespeople. Other popular reasons for writing cheques include paying for subscriptions, donations to charity or to pay school fees. We also explored what customers receive cheques for. The most popular reasons are for gifts (38%), for refunds (25%), or for such things as receiving dividend payments or insurance settlements. The introduction of cheque imaging will bring a number of benefits to consumers. They will benefit from the quicker, next weekday clearance timescales which cheque imaging will provide. The fact that they will no longer have to wait for six weekdays before they can be certain that the cheques they pay in have cleared and will not bounce will be an important benefit for them. The fact that if consumers write a cheque the money may also leave their own bank account more quickly than at present is not viewed as a problem. Customers simply see this as a consequence of the speeding up the cheque clearing process. The other big benefit of cheque imaging is that some banks and building societies may offer their customers the option of paying-in an image of the cheque by using a mobile banking app on their smartphone. Traditionally customers have paid their cheques into their bank account either over a branch counter (71%) or via an ATM (21%). For many customers, the added choice of how they can pay their cheques into their account will be welcome. This short report is intended to provide a snapshot of how consumers currently use cheques as well as providing some insight into their understanding of cheque imaging. If you would like to see more details of all our market research, it is provided in the information hub on our website Best wishes James Radford CEO Cheque and Credit Clearing Company Ltd. March 2018 Cheque imaging is the process that enables images of cheques to be exchanged between banks and building societies, through the Image Clearing System, for clearing and payment. This significantly speeds up the clearing process. 2 CONSUMER MARKET RESEARCH 2018 CONSUMER MARKET RESEARCH

3 Cheques written by consumers Cheques received by consumers 55% of UK account holders said that they had either made or received a payment by cheque in the past year 38% of UK account holders received payments by cheque 34% of UK account holders made payments by cheque Proportion of people writing cheques Proportion of people receiving cheques 60% 60% 45% 45% 30% 30% 15% 15% 43% 44% 38% 37% 34% 41% 40% 41% 39% 38% 0% % CONSUMER MARKET RESEARCH 2018 CONSUMER MARKET RESEARCH

4 What were cheques written for? Why did people receive cheques? Pay bill by post Pay friend/ individual 23% 10% Gifts Refunds Wages or salary Service in the home Personal services 20% 10% 38% 25% 10% Pay a club or society Other by post (e.g. gift) 15% 10% 13% Donation to charity Bill at counter 7% Dividends 10% Insurance settlement 7% leisure activities 11% Retail payments 2% Expenses 6% Selling something 5% Benefit payments 2% 6 CONSUMER MARKET RESEARCH 2018 CONSUMER MARKET RESEARCH

5 Where cheques were paid-in Awareness of cheque imaging Deposit Method 2017 Bank branch counter 71% The banking industry has started to roll out cheque imaging which makes the cheque clearing process quicker. Our market research asked consumers if they were aware of this development. ATM deposit Post Office counter 21% 5% Awareness of cheque imaging Change since Q Q Other 3% Q Mobile cheque deposit 1% Q Q Q % 5% 10% 15% 20% 25% Consumer 8 CONSUMER MARKET RESEARCH 2018 CONSUMER MARKET RESEARCH

6 Awareness of cheque imaging using a mobile app As part of the new cheque imaging system, some banks may allow customers to pay in cheques by taking images via their mobile banking app. Our market research asked consumers if they were aware of this development. Awareness of a mobile app Change since Q Q Q Q Q Q % 5% 10% 15% 20% Consumer 10 CONSUMER MARKET RESEARCH 2018 CONSUMER MARKET RESEARCH

7 This document is provided for information purposes only. While every effort is made to ensure the accuracy of information or other material contained in this document, it is provided on the basis that the Cheque and Credit Clearing Company (and its members, either individually or collectively) accept no responsibility for any loss, damage, cost or expense of whatsoever kind arising directly or indirectly from, or in connection with, the use by any person of any information or other material contained therein. Any use of the information or other material contained in this document shall signify agreement to this provision. Cheque and Credit Clearing Company Limited Published by the Cheque and Credit Clearing Company Limited Source: Kantar TNS and Cheque and Credit Clearing Company Ltd. 12 CONSUMER MARKET RESEARCH 2018