Time for Chip and PIN card payment

Is the cheque obsolete as a payment method? Well not quite according to the Cheque and Credit Clearing Company which reveals that in the UK in 2017 some four hundred and five million cheques were issued either as payments or to draw cash. Nevertheless this does represent a 15% reduction in cheque volumes and continues a trend seen in previous years of cheques being replaced by faster or direct card payment methods.


As a result direct payment forms are seeing a corresponding increase in volume with a 23% rise in single immediate payments in 2017. Interestingly, perhaps because of the fall in cheque payment volumes, the average value of a cheque actually increased by 5% in 2017 to £1217. Nevertheless, the way in which public perception is changing in respect of acceptable forms of payment does help those businesses which are looking to move away from cheques as a form of payment.


So what has replaced cheques as the preferred payment method? A recent survey revealed that 42% of people in the UK see credit or debit card with pin number as their preferred method of payment. Contactless methods of payment are also rising in popularity; although the majority of those interviewed indicated that they were happy with the current £30 contactless limit, citing security concerns should the limit rise.


What does the move away from cheques mean for businesses? Well, for a start it could mean a chance to speed up receipt of payments whilst simultaneously reducing administration time. Take a private healthcare business such as a chiropractor or physiotherapist for example. Relying on cheque payments often meant time spent in paperwork, in drawing up invoices after the time of the appointment, posting them out and then waiting for cheques to be posted back. Even if the cheque payment was made at the time of the appointment, administration time was still required to take the payment to the bank and await clearance.


Simply by taking card payment details as part of the appointment process, at a stroke all of that burdensome administration time can be avoided. With card details to hand, as soon as the appointment has taken place, the card payment can be taken. Moreover, by pre-authorising the payment at the time of booking, health practitioners can be reassured that funds are available to pay for treatment.


There is another benefit of pre-authorising card payments and that is client attendance rates. Provided the health practice ensures the client is fully aware of potential non-attendance fees, clients are far more likely to attend appointments or to telephone well in advance should they be prevented from doing so. This not only helps to ensure clients receive the treatment they need at the time at which it is most effective, it also helps to ensure that treatment times are fully utilised. Not only did this maximise potential income for the health practice, it also means that practitioners are not turning aside potential clients due to fully booked treatment times and then finding that some of those slots are left vacant due to no-shows.


Is the cheque obsolete? Well no, not quite, but with chip and pin card payment systems to hand practices at least should be working to encourage automated payments for the benefit of the practice and its potential clients.