CHEQUES: MARKET RESEARCH 2017 July 2017
INTRODUCTION Market research conducted annually in April Consumer research C&CCC 11 th annual survey of consumers writing and receiving cheques by Kantar TNS 2,000 consumers surveyed face-to-face* Business research C&CCC 10th annual survey of business users of cheques by BDRC 1,000 businesses surveyed by telephone* Charity research C&CCC 2 nd annual survey of charities writing and receiving cheques by Ipsos MORI 1,000 charities surveyed by telephone* *For more information on the base data for each question, please contact info@chequeandcredit.co.uk 2
CONSUMER USE OF CHEQUES
Research conducted by Kantar TNS USE OF CHEQUES 91% of those questioned have a personal account with a bank or building society 34% of UK account holders make payments by cheque 38% of UK account holders received payments by cheque 55% of UK account holders said that they had either made or received a payment by cheque in the past year 4
Research conducted by Kantar TNS CONSUMER CHEQUE USE 70% 60% 50% 40% 30% 59% 55% 52% 50% 49% 46% 43% 44% 41% 40% 41% 38% 39% 37% 38% 34% 20% 10% 0% 2010 2011 2012 2013 2014 2015 2016 2017 Proportion of people writing cheques Proportion of people receiving cheques % of account holders writing and receiving cheques 5
Research conducted by Kantar TNS PROPORTIONS WRITING AND NOT WRITING CHEQUES, BY AGE 0% 20% 40% 60% 80% 100% 16-24 25-34 35-44 45-54 55-64 65+ Proportion of people who write cheques by age group Proportion of people who do not write cheques by age group % of account holders writing and receiving cheques 6
Research conducted by Kantar TNS WHAT ARE CHEQUES WRITTEN FOR? Pay bill by post 23% Retail 2% payment Service in the home 20% 7% 10% Bill at a counter Personal services Pay a club or society 15% Other by post (e.g., gift) 13% 10% Donation to charity Pay friend / individual 10% Child s school or leisure 11% % of account holders writing cheques and who used a cheque for these purposes in the past year 7
Research conducted by Kantar TNS CONVENIENT ALTERNATIVES TO CHEQUES PURPOSE Purchase in a shop not accepting credit or debit cards YES 33% CONVENIENT ALTERNATIVE Cash % OF YES PEOPLE 100% Money into savings account, investment 66% Internet Banking Direct Debit 72% Paying by post for an internet purchase 71% PayPal Credit Card 67% Bill at a counter 47% Direct Debit Debit Card Internet Banking 64% Pay a club Internet banking 47% or society Cash 51% % of account holders writing cheques for each purpose who think there is a convenient alternative to a cheque Other alternatives including Apple Pay and Android Pay were not picked. 8
Research conducted by Kantar TNS CONVENIENT ALTERNATIVES TO CHEQUES PURPOSE YES CONVENIENT ALTERNATIVE % OF YES PEOPLE Personal Debit Card 63% 48% services Cash Childcare, children s school, leisure activities 59% Internet Banking PayPal 43% Donation Direct Debit 53% To charity Internet Banking 35% Bill by post 52% Internet Banking Direct Debit 32% % of account holders writing cheques for each purpose who think there is a convenient alternative to a cheque Other alternatives including Apple Pay and Android Pay were not picked. 9
Research conducted by Kantar TNS CHEQUES RECEIVED BY CONSUMERS Method used to deposit cheques into bank account Over a bank branch counter 71% ATM deposit 21% Over a counter at the Post Office 5% Other 3% Mobile cheque deposit 1% 10
CHANGES IN CHEQUE WRITING OVER THE LAST THREE YEARS 100% 80% 20% 31% Research conducted by Kantar TNS 23% 60% 20% 19% 19% 40% 20% 53% 46% 53% 0% 2015 2016 2017 Write many fewer Write slightly fewer No change Write slightly more Write many more Don t know % of account holders writing cheques 11
Research conducted by Kantar TNS CHANGES IN CHEQUE WRITING OVER THE NEXT THREE YEARS 2% 1% 37% 39% Write many fewer Write slightly fewer No change Write slightly more Write many more 18% % of account holders writing cheques 12
Research conducted by Kantar TNS PROBLEMS IF UNABLE TO WRITE CHEQUES 100% 90% 15% 14% 14% 80% 70% 60% 40% 43% 43% Don't know 50% Major Problems 40% Minor Problems No Problems 30% 20% 42% 43% 41% 10% 0% 2015 2016 2017 Consumers still worried 57% would have problems if unable to write cheques % of account holders writing cheques 13
PROPORTIONS RECEIVING AND NOT RECEIVING CHEQUES, BY AGE Research conducted by Kantar TNS 0% 20% 40% 60% 80% 100% 16-24 35% 65% 25-34 34% 66% 35-44 36% 64% Receiving Not receiving 45-54 41% 59% 55-64 41% 59% 65+ 42% 58% Proportions writing and receiving cheques by age group; excludes don t knows 14
Research conducted by Kantar TNS WHAT ARE CHEQUES RECEIVED FOR? Gifts 38% Insurance settlement 7% Refunds 25% Expenses 6% Wages or salary 10% Selling something 5% Dividends 10% Benefit payments 2% Gifts and refunds are most common purposes for receiving cheques % of account holders who received a cheque in the past year 15
Research conducted by Kantar TNS ATTITUDES TOWARDS CHEQUES I'm wary of accepting cheques from people I don't know because I can't be sure they won't bounce 31% 23% 28% 9% 6% 0% 20% 40% 60% 80% 100% Agree strongly Agree slightly Neither agree nor disagree Disagree slightly Disagree strongly Don't know 16
Research conducted by Kantar TNS CHEQUE IMAGING 15% of consumers are aware that the Banking industry is planning to introduce cheque imaging, which will make the cheque clearing process faster - similar to 2016 with 13% My Bank 29% Where did you hear about cheque imaging? Television Newspaper Online 15% 15% 17% Friend/Family 10% Other Radio Not Sure 6% 7% 8% Magazine 2% 17
Research conducted by Kantar TNS CHEQUE IMAGING MOBILE 12% of consumers are aware that the Banking industry is planning to introduce cheque imaging, which MAY allow people to pay in cheques by taking IMAGES via THEIR mobile banking app similar to 2016 with 11% My Bank 22% Where did you hear about cheque imaging on your mobile? Television Newspaper Online Friend/Family 16% 16% 16% 16% Other 10% Radio 7% Not Sure 5% Magazine 3% 18
Research conducted by Kantar TNS CHEQUE IMAGING AWARENESS Awareness of cheque imaging Change since Q3-2015 Awareness of a mobile app Change since Q3-2015 Q3-2015 Q3-2015 Q1-2016 Q1-2016 Q3-2016 Q3-2016 Q4-2016 Q4-2016 Q1-2017 Q1-2017 0% 5% 10% 15% 20% 25% Consumer 0% 5% 10% 15% 20% Consumer 19
Research conducted by Kantar TNS KNOWLEDGE OF 2-4-6 CHEQUE PROPOSITION AMONG CHEQUE RECIPIENTS 2-4-6 C&CCC has surveyed knowledge of the 2-4-6 cheque proposition among cheque recipients since 2008 12% of cheque recipients in 2017 correctly identify T+2 as when value is received Withdrawal is the best understood proposition in 2017 23% of cheque recipients think withdrawal happens on T+4 Fate is the least well understood. 2% of cheque recipients correctly identify T+6 in 2017 20
BUSINESS USE OF CHEQUES
Research conducted by BDRC CHEQUES WRITTEN BY BUSINESSES 57% of UK businesses said that they had made payments by cheque in the past year 40% of UK businesses said that they had made payments by cheque in the past month Average number of cheques written per month by businesses: 26 22 22 22 19 13 12 12 5 7 5 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Market Research Year 22
Research conducted by BDRC CHEQUES RECEIVED BY BUSINESSES 53% of UK businesses said that they had received payments by cheque in the past month Average number of cheques received per month by businesses 9 28 22 27 27 22 16 16 8 13 9 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 75% of UK businesses said that they had either made or received any payments by cheque in the past month 23
Research conducted by BDRC CHEQUES RECEIVED BY BUSINESSES Method used to deposit cheques into the business bank account Over a bank branch counter 76% Over a post office counter 9% Drop off envelope in branch 7% ATM deposit 4% Other 4% Bulk deposit by a courier 2% Bulk deposit 1% Mobile cheque deposit 1% 24
Research conducted by BDRC HOW PROPORTION OF PAYMENTS MADE BY CHEQUE CHANGES OVER TIME 100% 6% 6% 80% 28% 38% 60% 40% 20% 32% 22% 12% 10% 19% 23% None No longer use Much smaller Slightly smaller No change Slightly greater Greater 0% Past 3 years Next 3 years 25
Research conducted by BDRC WHAT ARE CHEQUES WRITTEN FOR? Pay a trade supplier 72% Other ad-hoc payments to businesses 47% Regular business commitment 33% Refunds to customers 14% Wages & salaries 13% Employee expenses 13% % of businesses who use cheques for each purpose, 2016 Base: All businesses writing at least one cheque in the past month 26
Research conducted by BDRC CONVENIENT ALTERNATIVES PURPOSE Pay a trade supplier YES 56% CONVENIENT ALTERNATIVE Bacs Internet % OF YES PEOPLE 89% Other ad-hoc payments to businesses 47% Bacs Internet 86% Regular business commitment 57% Bacs Direct Debit 81% Refunds to customers 47% Bacs Cash 79% Bacs Employee expenses 29% Cash 78% Wages & salaries 41% Bacs 69% % of businesses who believe there is a convenient alternative payment method 27
Research conducted by BDRC REASONS WHY BUSINESSES USE CHEQUES Payee request 35% Must send by post 8% Always have used cheques 34% Money leaves account slowly 4% Manage cash flow 28% Cheaper than other methods 4% No payee account details 19% Payee may not cash cheque 2% Control who can pay 11% % of businesses who gave each reason for making payments by cheque 28
Research conducted by BDRC PROBLEMS IF UNABLE TO WRITE CHEQUES 100% 80% 16% 18% 26% 60% 40% 53% 45% 48% Don't know Major Problems Minor Problems No Problems 20% 31% 37% 25% 0% 2015 2016 2017 3/4 of businesses would have problems if unable to write cheques % of businesses with each attitude if unable to write cheques at the current time 29
Research conducted by BDRC ATTITUDES TO RECEIVING CHEQUES 100% 90% 80% 22% 70% 60% 20% 50% 40% 30% 46% 20% 10% 0% 6% Prefer and request cheques No preference Do not prefer/request cheques Prefer but do not request cheques Do not prefer but will accept cheques Don't know % of businesses that received cheques in the past month 30
Research conducted by BDRC WIDER ATTITUDES TOWARDS CHEQUES 31
Research conducted by BDRC CHEQUE IMAGING 20% of businesses are aware that the Banking industry is planning to introduce cheque imaging, which will make the clearing process faster. This is broadly similar to 2016 (21%). My Bank 33% Where did you hear about cheque imaging to make clearing faster? Newspaper Website 14% 18% Not sure 12% Word of Mouth 10% Television 7% Radio 7% Magazine 3% 32
Research conducted by BDRC CHEQUE IMAGING MOBILE 11% of businesses are aware that the Banking industry is planning to introduce cheque imaging, which may allow businesses to deposit cheques by taking images via their mobile banking app or using a desktop scanner. This is a significant decrease from 2016 (16%). My Bank 29% Where did you hear about deposit by cheque imaging? Newspaper Website Word of Mouth Not sure 12% 12% 15% 17% Television 7% Radio Social media Magazine 1% 5% 5% 33
Research conducted by BDRC CHEQUE IMAGING AWARENESS Awareness of cheque imaging Change since Q3-2015 Awareness of a mobile app Change since Q3-2015 Q3-2015 Q3-2015 Q1-2016 Q1-2016 Q3-2016 Q3-2016 Q4-2016 Q4-2016 Q1-2017 Q1-2017 0% 5% 10% 15% 20% 25% 30% Business 0% 5% 10% 15% 20% 25% Business 34
Research conducted by BDRC KNOWLEDGE OF 246 PROPOSITION 246 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Value 12% 6% 60% 21% Withdrawal 31% 47% 15% 7% Fate 3% 85% 6% 5% Correct Earlier Later Don't know % of businesses that received cheques in the past month
CHARITY USE OF CHEQUES
Research conducted by Ipsos MORI USE OF CHEQUES 75% of charities had received a cheque in the past month 65% of charities had made a payment by cheque in the past month 87% of charities who had either made or received a payment by cheque in the past month 77% of charities said they made a payment by cheque in the past year 87% of charities also said they had received a cheque in the past year 37
Research conducted by Ipsos MORI CHARITIES MAKING CHEQUE PAYMENTS OVER THE LAST MONTH 100% 80% 4% 12% 60% 18% 41% 18% 9% 40% 28% 32% 56% 20% 35% 30% 30% 0% 0 1-10,000 10,001-100,000 More than 100,000 Charity Size (by income) None 1-5 6-10 11-15 16-25 26-50 51-100 101-250 251-500 More than 500 Don't know % of charities who made a cheque payment in the last month by income 38
Research conducted by Ipsos MORI WHAT ARE CHEQUES WRITTEN FOR? Pay a supplier 66% Other ad-hoc payments to organisations 62% Expenses to non salaried staff and volunteers 49% Pay beneficiaries or 36% fund projects Regular commitment e.g. rent Employee expenses 35% 25% Refunds to donors or beneficiaries % of charities who use cheques for each purpose, 2017 Base: All charities writing at least one cheque in the past month 17% 39
Research conducted by Ipsos MORI CONVENIENT ALTERNATIVES TO CHEQUES Paying beneficiaries or funding projects Paying Expenses, regular wages and commitments salaries for e.g. rent salaried staff Expenses, wages and salaries for non salaried staff and volunteers Refunds to donors or beneficiaries Yes, there is an alternative 39% 61% 55% 49% 51% Bacs Direct Credit 58% 31% 51% 53% 51% Internet Banking 28% 21% 35% 25% 38% Direct Debit 5% 39% 4% 2% 0% Cash 1% 2% 4% 16% 2% % of charities writing cheques for each purpose who think there is a convenient alternative to a cheque Other alternatives including Apple Pay and Android Pay were not picked 40
Research conducted by Ipsos MORI REASONS WHY CHARITIES PAY BY CHEQUE Payee request 50% No other method available 38% Control who can pay 50% No payee account details 36% Need clear paper trail 46% Manage cash flow 28% Always have used cheques 44% Money leaves account slowly 15% Must send advice by post 39% Payee may not cash cheque 7% Main reasons why charities make payments by cheque 41
Research conducted by Ipsos MORI CHANGES IN CHEQUE WRITING OVER THE LAST AND NEXT THREE YEARS 34% of charities say their cheque usage has not changed in the last three years, and 43% say their cheque usage will not change in the next three years! Will write many more, 1% Will write slightly more, 1% Will write many fewer, 21% Will write slightly fewer, 18% Will have no change, 43% 42
Research conducted by Ipsos MORI PROBLEMS IF UNABLE TO WRITE CHEQUES Don t know, 3% No problems, 19% Major problems, 42% Minor problems, 36% Charities are concerned 78% would have problems if unable to write cheques % of charities writing cheques 43
Research conducted by Ipsos MORI CHEQUE DONATIONS AS A PROPORTION OF ANNUAL DONATION INCOME 35% 30% 25% 20% 15% 10% 5% 0% None Some, but less than half Around half More than half, but not all Almost all or all Do not receive donations Don't know 53% of charities say they receive donation income by cheque 29% of charities say they receive half or more of their donation income by cheque 44
Research conducted by Ipsos MORI ATTITUDES TOWARDS RECEIVING CHEQUES We prefer not to receive cheques and generally try to ask for other payment methods 14% We prefer not to receive cheques, but we don't try to influence the method that is used to pay us money 13% We don't mind how we receive money and don't request payment by any method 57% We prefer to receive money by cheque, but don't try to influence the methods that are used by others to pay us money 6% We prefer to receive money by cheque and usually ask for payment by cheque whenever possible 7% 0% 10% 20% 30% 40% 50% 60% 45
Research conducted by Ipsos MORI HOW CHARITIES PAY CHEQUES IN 7% 5% Bank branch counter Post office counter 1% 5% 1% 3% 9% ATM deposit Bulk deposit Bulk deposit by courier Drop off envelope in branch 74% Other Don t know Respondents could select more than one option 46
Research conducted by Ipsos MORI CHEQUE IMAGING 30% of charities are aware that the banking industry is planning to introduce cheque imaging, which will make the cheque clearing process faster. Significant increase from 2016 (23%). Via my bank 32% Where did you hear about cheque imaging? Newspaper Don't remember 13% 20% Television 10% Elsewhere online 9% Radio Friend/family 6% 7% Other 4% Colleague Magazine 1% 2% 47
Research conducted by Ipsos MORI CHEQUE IMAGING MOBILE 21% of charities are aware that the banking industry is planning to introduce cheque imaging, which MAY allow people to pay in cheques by taking IMAGES via THEIR mobile banking app. This is a significant increase from 2016 (15%). Via my bank 22% Where did you hear about cheque imaging on your mobile? Newspaper Elsewhere online Television 13% 18% 20% Don't remember 10% Radio 6% Friend/family 6% Other 5% Colleague 2% Magazine 1% Email/memo 1% Social media 1% 48
Research conducted by Ipsos MORI CHEQUE IMAGING AWARENESS Awareness of cheque imaging Change since Q3-2015 Awareness of a mobile app Change since Q3-2015 Q3-2015 Q3-2015 Q1-2016 Q1-2016 Q3-2016 Q3-2016 Q4-2016 Q4-2016 Q1-2017 Q1-2017 0% 5% 10% 15% 20% 25% 30% 35% Charity 0% 5% 10% 15% 20% 25% Charity 49
Research conducted by Ipsos MORI KNOWLEDGE OF 2-4-6 CHEQUE PROPOSITION AMONG CHEQUE RECIPIENTS 2-4-6 C&CCC has surveyed knowledge of the 2-4-6 cheque proposition among charities 12% of cheque recipients in 2017 correctly identify T+2 as when value is received Withdrawal is the best understood proposition in 2017 28% of cheque recipients think withdrawal happens on T+4 Fate the least well understood. 2% of cheque recipients correctly identify T+6 in 2017 50
SUMMARY OF CHEQUE AWARENESS OVER TIME
SUMMARY CHEQUE IMAGE AWARENESS Q1-2017 Awareness of cheque imaging which will make the clearing process faster - greatest among charities Awareness of cheque imaging which may allow people to pay in cheques through a mobile app greatest amongst charities Charity Charity Consumer Consumer Business Business 0% 5% 10% 15% 20% 25% 30% 35% Cheque Imaging 0% 5% 10% 15% 20% 25% Cheque Imaging - Mobile App 52
SUMMARY CHEQUE IMAGE AWARENESS OVER TIME Awareness of cheque imaging Change since Q3-2015 Awareness of a mobile app Change since Q3-2015 Q3-2015 Q3-2015 Q1-2016 Q1-2016 Q3-2016 Q3-2016 Q4-2016 Q4-2016 Q1-2017 Q1-2017 0% 5% 10% 15% 20% 25% 30% 35% Business Consumer Charity 0% 5% 10% 15% 20% 25% Business Consumer Charity 53