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