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Small companies not ready for phasing out of cheque payments.

London, UK (13/04/2011)

Small firms are unprepared for the government’s plans to begin phasing out the cheque guarantee card scheme in just two months’ time, with 75% of Britain’s small firms remaining unaware, a new survey has found.

Research from payment expert WorldPay also revealed that two out of five small businesses are still depending on cheques as a day-to-day payment method, while nearly half (45%) of respondents admitted they had no idea that the cheque is likely to be phased out completely in 2018.

Over 60% of respondents said they have made no plans to make payments by alternative methods, and 29% said they still expect to rely on cheques over the next few years.

Suggesting that there is still a long way to go in preparing businesses for the shift, the research, also showed that three out of five companies (62%) have not made any plans for an another payment method, with 29% saying they still expect to rely on cheques over the next few years.

However, there seems to be support for using cards in business transactions. Six out of 10 respondents said that card payments offered faster transaction times and would ease the time and costs associated with manually banking cheques.

Meanwhile, 32% of the entrepreneurs surveyed said that the added safety of cards would be a major incentive to switch over from cheque payments.

According to Chris Thorne, senior VP of WorldPay’s SME Sales division, small and medium sized businesses need to be aware of the implications of the change, because “the death of the cheque guarantee card system will present UK start-ups and sole traders with a number of challenge”, Thorne added that businesses “need to be supported in their move to other payment methods” and stated that “it’s a good idea for businesses to consider their options soon, to get used to a new system before the cheque guarantee card scheme is phased out this year”.

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