CHEQUES: MARKET RESEARCH 2016 June 2016
INTRODUCTION Market research conducted annually Business research C&CCC annual survey of business users of cheques 1,000 businesses surveyed by telephone Consumer research C&CCC annual survey of consumers writing and receiving cheques 2,000 consumers surveyed face-to-face Charity research C&CCC 1 st annual survey of charities writing and receiving cheques 1,000 charities surveyed by telephone 2
CONSUMER USE OF CHEQUES
USE OF CHEQUES 91% of those questioned have a personal account with a bank or building society 37% of UK account holders make payments by cheque Slightly down from 39% in 2015 39% of UK account holders received payments by cheque Slightly down from 41% in 2015 48% of UK account holders said that they had neither made nor received a payment by cheque in the past year 4
CONSUMER CHEQUE USE FALLING 70% 60% 50% 40% 30% 59% 55% 52% 46% 50% 49% 43% 44% 41% 40% 41% 38% 39% 37% 20% 10% 0% 2010 2011 2012 2013 2014 2015 2016 Proportion of people writing cheques falling Proportion of people receiving cheques stable for now % of account holders writing and receiving cheques 5
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+ Older people most likely to write cheques 92% of 16-24 age group do not write cheques % of account holders writing and receiving cheques 6
WHAT ARE CHEQUES WRITTEN FOR? Pay bill by post 23% Other by post (e.g., gift) 12% Service in the home 22% Child s school or leisure 10% Pay friend / individual 14% Personal services 9% Pay a club or society 13% Bill at a counter 9% Donation to charity 13% % of account holders writing cheques and who used a cheque for these purposes in the past year 7
CONVENIENT ALTERNATIVES TO CHEQUES Personal services 66% Debit card Cash Bill at a counter 63% Direct Debit Debit card Paying by post for an internet purchase 60% Paypal Debit Card Money into savings account, investment 57% Internet banking Debit card Bill by post 56% Internet banking Debit card % of account holders writing cheques for each purpose who think there is a convenient alternative to a cheque 8
CONVENIENT ALTERNATIVES TO CHEQUES Purchase in a shop not accepting credit or debit cards 55% Cash Debit card Childcare, children s school, leisure activities 52% Internet banking Cash Donation To charity 49% Direct debit Internet banking Pay a club or society 48% Internet banking Direct debit Cards often named as convenient alternative. Cash and internet banking also popular. % of account holders writing cheques for each purpose who think there is a convenient alternative to a cheque 9
CHEQUES RECEIVED BY CONSUMERS Method used to deposit cheques into bank account 10
CHANGES IN CHEQUE WRITING OVER THE LAST FEW YEARS 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% 46% 19% 31% 2012 2013 2014 2015 2016 In 2016 more users say there has been no change in their cheque use Write many fewer Write slightly fewer No change Write slightly more Write many more % of account holders writing cheques 11
CHANGES IN CHEQUE WRITING OVER THE NEXT FEW YEARS Write many fewer 45% 36% Write slightly fewer No change 17% Write slightly more Write many more 12
PROBLEMS IF UNABLE TO WRITE CHEQUES 100% 90% 80% 70% 43% No problems at all 60% 50% 40% 30% 43% Minor problems 20% 10% 0% 14% 2010 2011 2012 2013 2014 2015 2016 Major problems Users 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 0% 20% 40% 60% 80% 100% 16-24 25-34 35-44 45-54 55-64 65+ 55-64 only group with majority of receivers Youngest age groups most likely not to receive Proportions writing and receiving cheques by age group; excludes don t knows 14
WHAT ARE CHEQUES RECEIVED FOR? Refunds 33% Expenses 7% Gifts 30% Insurance settlement 6% Wages or salary 10% Selling something 4% Dividends 9% Refunds and gifts are most common purposes for receiving cheques % of account holders who received a cheque in the past year 15
ATTITUDES TOWARDS CHEQUES I m wary of accepting cheques from people I don t know because I can t 28% 24% 29% 11% 8% be sure they won t bounce When receiving cheques, it s irritating that I have to take them to the bank 25% 19% 21% 19% 15% When receiving cheques, it s irritating that I have to wait to get the money 23% 20% 24% 20% 13% When writing cheques, I feel that the money has left my bank account as soon as the cheque is written 19% 22% 11% 24% 24% Agree strongly Agree slightly Neither agree nor disagree Disagree slightly Disagree strongly 16
CHEQUE IMAGING 13% of consumers are aware that the Banking industry is planning to introduce cheque imaging, which will make the cheque clearing process faster - down from 16% in 2015 Where did you hear about cheque imaging? 17
CHEQUE IMAGING 11% 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 2015 with 12% Where did you hear about cheque imaging on your mobile? 18
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 2007 Withdrawal is the best understood proposition in 2016 25% of cheque recipients think withdrawal happens on T+4 Fate the least well understood. 1% of cheque recipients correctly identify T+6 in 2016 11% of cheque recipients in 2016 correctly identify T+2 as when value is received 19
KNOWLEDGE OF THE 2-4-6 CHEQUE PROPOSITION AMONG CHEQUE RECIPIENTS Fate 2010 2-4-6 Fate 2011 Fate 2012 Fate 2013 Fate 2014 Fate 2015 Fate 2016 Withdrawal 2010 Withdrawal 2011 Withdrawal 2012 Withdrawal 2013 Withdrawal 2014 Withdrawal 2015 Withdrawal 2016 Value 2010 Value 2011 Value 2012 Value 2013 Value 2014 Value 2015 Value 2016 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Correct Earlier Later Not sure No idea Base: account holders who received a cheque in the last year 20
BUSINESS USE OF CHEQUES
CHEQUES WRITTEN BY BUSINESSES 55% of UK businesses said that they had made payments by cheque in the past month, the same as in 2015 Average number of cheques written per month by businesses increased slightly to 12 22
CHEQUES RECEIVED BY BUSINESSES 62% of UK businesses said that they had received payments by cheque in the past month, up slightly from 60% in 2015 Average number of cheques received per month by businesses 13 26% of UK businesses said that they had neither made nor received any payments by cheque in the past month, down from 30% in 2015 23
CHEQUES RECEIVED BY BUSINESSES Method used to deposit cheques into the business bank account 24
HOW PROPORTION OF PAYMENTS MADE BY CHEQUE CHANGES OVER TIME Greater Greater No change No change Slightly smaller Slightly smaller Much smaller Much smaller 25
WHAT ARE CHEQUES WRITTEN FOR? Pay a trade supplier 59% Other ad-hoc payments to businesses 45% Regular business commitment 35% Wages & salaries 11% Refunds to customers 13% Employee expenses 10% % of businesses who use cheques for each purpose, 2016 Base: All businesses writing at least one cheque in the past month 26
CONVENIENT ALTERNATIVES Pay a trade supplier 65% Bacs Internet Other ad-hoc payments to businesses 64% Bacs Internet Regular business commitment 77% Bacs Direct Debit Wages & salaries 34% Bacs Refunds to customers 53% Internet Bacs Employee expenses 42% Bacs Internet % of businesses who believe there is a convenient alternative payment method 27
REASONS WHY BUSINESSES USE CHEQUES Always have used cheques 27% Cheaper than other methods 9% Manage cash flow 22% No payee account details 13% Payee request 32% Must send by post 8% Money leaves account slowly 8% Payee may not cash cheque 2% Control who can pay 16% % of businesses who gave each reason for making payments by cheque 28
PROBLEMS IF UNABLE TO WRITE CHEQUES No problems at all Some minor problems Major problems Small change over time 2/3 would have problems if unable to write cheques Proportion who would experience major problems is falling % of businesses with each attitude if unable to write cheques at the current time 29
ATTITUDES TO RECEIVING CHEQUES Prefer cheques Request cheques Prefer cheques Don t influence payer No preference Don t influence payer Prefer no cheques Don t influence payer More now prefer no cheques Prefer no cheques Request no cheques % of businesses that received cheques in the past month 30
WIDER ATTITUDES TOWARDS CHEQUES When receiving cheques, it is irritating that we have to take them to the bank When receiving cheques, it is irritating that we have to wait to get the money When writing cheques, we feel that the money has left the bank account as soon as the cheque is written Agree strongly Agree slightly Neither agree nor disagree Disagree slightly Disagree strongly 31
CHEQUE IMAGING 21% of businesses are aware that the Banking industry is planning to introduce cheque imaging, which will make the clearing process faster Where did you hear about cheque imaging to make clearing faster? 32
CHEQUE IMAGING 16% 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 Where did you hear about deposit by cheque imaging? 33
Knowledge of 246 proposition 246 Understanding of the 246 timescales was tested The correct timescales are described below The next slide shows the proportion of respondents that correctly understand the 246 timings, compared to those that believe timings are earlier or later Value Day 2 Interest begins to be paid on the amount paid in by cheque, or interest due on outstanding overdraft balances is reduced accordingly Withdrawal Day 4 The payee can withdraw money paid in by cheque Fate Day 6 The payee can be certain the money won t be reclaimed from their account without their consent (unless they are a knowing party to fraud) 34
Knowledge of 246 proposition 246 Value Withdrawal Fate Knowledge of precise timings remains limited Earlier Correct Later Don t know % of businesses that received cheques in the past month 35
CHARITY USE OF CHEQUES
USE OF CHEQUES 74% of charities had received a cheque in the past month The average number of cheques received per month was 18 76% of charities had made a payment by cheque in the past month The average number of cheque payments made per month was 11 13% number of charities who had neither made or received a payment by cheque in the last month 37
CHARITIES MAKING CHEQUE PAYMENTS OVER THE LAST MONTH 60% 50% 56% 48% 40% 30% 30% 28% 39% 38% 35% 33% 33% 20% 24% 23% 10% 15% 0% 0-10,000 10,001-100,000 100,001-1,000,000 More than 1,000,000 No cheque payments Between 1 and 10 cheque payments 10+ cheque payments % of charities who made a cheque payment in the last month by income 38
WHAT ARE CHEQUES WRITTEN FOR? Pay a trade supplier 64% Other ad-hoc payments to businesses 58% Expenses to non salaried staff and volunteers Regular commitment e.g. rent 41% 40% Pay beneficiaries or 39% fund projects Employee expenses 24% Refunds to donors or beneficiaries % of charities who use cheques for each purpose, 2016 Base: All charities writing at least one cheque in the past month 17% 39
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 58% 28% 54% 47% 43% 32% 10% 28% 33% 40% 4% 55% 13% 6% 2% 4% 0% 0% 11% 2% % of charities writing cheques for each purpose who think there is a convenient alternative to a cheque 40
REASONS WHY CHARITIES PAY BY CHEQUE Always have used cheques 55% Need clear paper trail 54% Manage cash flow 42% No payee account details 33% Payee request 43% Must send advice by post 43% Money leaves account slowly 18% Payee may not cash cheque 11% Control who can pay 59% No other method available 38% % of charities who gave each reason for making payments by cheque 41
CHANGES IN CHEQUE WRITING OVER THE LAST THREE YEARS 100% 90% 80% 70% Write many fewer 60% 50% 40% 30% Write slightly fewer 20% 10% 0% 0-10,000 10,001-100,000 100,001-1,000,000 More than 1,000,000 No change Write slightly more Write many more % of charities writing cheques by income 42
CHANGES IN CHEQUE WRITING OVER THE NEXT THREE YEARS 3% 1% 24% Write many fewer Write slightly fewer No change 54% 15% Write slightly more Write many more 43
PROBLEMS IF UNABLE TO WRITE CHEQUES 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% No problems at all Minor problems Major problems Users are concerned 46% would have major problems if unable to write cheques % of charities writing cheques 44
ATTITUDES TOWARDS RECEIVING CHEQUES We prefer not to receive cheques, but we don't try to influence the method that is used to pay us money 12% We don't mind how we receive money and don't request payment by any particular method 53% We prefer to receive money by cheque, but don't try to influence the methods that are used by others to pay us money We prefer to receive money by cheque and usually ask for payment by cheque whenever possible 10% 14% 45
HOW CHARITIES PAY CHEQUES IN 1% 1% 4% 2% Bank branch counter 9% Post office counter Drop envelope in branch ATM deposit 81% Bulk deposit 46
CHEQUE IMAGING 23% of charities are aware that the banking industry is planning to introduce cheque imaging, which will make the cheque clearing process faster Other 14% Where did you hear about cheque imaging? Friend/ Family Not sure 2% 6% Television Online 6% 10% Newspaper 21% My bank 41% 47
CHEQUE IMAGING 15% 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 Where did you hear about cheque imaging on your mobile? Other Friend/ Family Not sure Television 11% 8% 9% 11% Online 15% Newspaper My bank 23% 23% 48
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 Withdrawal is the best understood proposition in 2016 27% of cheque recipients think withdrawal happens on T+4 Fate the least well understood. 2% of cheque recipients correctly identify T+6 in 2016 Only 12% of cheque recipients in 2016 correctly identify T+2 as when value is received 49
KNOWLEDGE OF THE 2-4-6 CHEQUE PROPOSITION AMONG CHARITY CHEQUE RECIPIENTS 2-4-6 Fate 2016 Withdrawal 2016 Value 2016 0% 20% 40% 60% 80% 100% Correct Earlier Later Not sure No idea Base: account holders who received a cheque in the last year 50