In Australia, similar to other countries, cheques are in long-term decline. Until the1980s cheques were the main non-cash payment method. However, cheque use has dropped by almost 60% in Australia over the past ten years and is continuing to drop at a rapid annual rate. The main reason for this is that payment cards and other convenient electronic payment systems have taken over. Today, cheques only account for about 5% of all non-cash payments made by consumers and businesses each day.
Cheque processing and clearing
Cheques can be convenient in that the only information you need to make a payment is the name of the payee. As well, the payee does not need to have any special facilities or technology in place to accept them. However, because cheques need to be handled manually, they are expensive, and take longer, to process than cards and other electronic payments. Typically, a cheque will take three business days to clear. A diagram of how most cheques are processed is included in the "Cheques Fact Sheet" below. For more detailed information on cheques, contact your financial institution.
Financial institution cheques or "bank" cheques
Unlike the common belief, financial institution cheques are not exactly the same as cash and still need to be checked to ensure that they have not been stolen or altered in any way. It is recommended that businesses, such as car dealers, check with the issuing financial institution whether the cheque they receive is valid before handing over the purchased item. Some contact details are provided below.
Financial Institution Contact Details for Cheques - Download PDF