UK bank u-turn sees cheques saved

I'm okay with the decision to extend the life of cheques in the UK - there seem to be various groups (mostly charities) that rely on this payment medium and would suffer without it.

But this shows how hard it is to change customer behaviour. The eBilling industry has been trying to move people from paper to electronic delivery for over 10 years. 

What the banks proposed was a cut off by when those using cheques would have to make other arrangements. I venture that had this cut off date been upheld, the groups would have been forced to evolve their business processes and find new and innovative ways of maintaining the payments streams. But this would have been painful.

What I do think should now happen is that the costs of maintaining the cheque processing infrastructure should be assigned directly to the accounts using the medium - hence slowly forcing companies using this outdated instrument to look for more cost effective payment processes.

Unless the economical impact of the diminishing volume and hence increased average costs are passed directly onto the users we'll never become truly digital.

This is a great win for supporters of customer experience, especially that of the man on the street. When it comes to making a donation, there's nothing more convenient than writing a cheque, putting it into an envelope and mailing it.

This also highlights the critical success factors for bringing about changes in consumer behavior.

Rapid adoption of mobile RDC proves that consumers will change their behavior if they stand to gain something from the change. On the other hand, they'll resist change that results in worse customer experience just for the sake of going digital. Instead of cheque, let's see what the customer has to go through to make an ePayment: Navigate through layers of username/passwords; maybe carry an authentication device; enter long account numbers and sort codes; adapt the real name of the beneficiary and narration of transaction to the restricted field lengths of the banks' application; hope that the Internet connection and the Internet Banking application don't fail during the transaction; and, last but not the least, suffer the risk of sending the payment into a state of suspended animation in the ether with even a slight mismatch in the data.

There's a lot that banks and technology vendors need to do to improve customer experience of the digital channel before they can hope to change the behavior of the man on the street. Hopefully, this episode serves as a siren call. 

I just came across a Daily Mail article today. The title of this article says it all: "... Cheques will not be scrapped in 2018 because there are no better alternatives".

Talking about costs, quite frankly I don't see why the man / woman on the street should care if banks incur higher costs for processing cheques: All costs of banks - including fat bonuses to its executives - are going to be passed on to him / her in one form or the other anyway. Why single out only the cost of cheque processing? However, my personal experience with Phone Banking and Internet Banking with two Indian and two European banks in the last 24 hours permits me the luxury of sticking to the topic of cheque processing costs. 

I'm willing to pay a bank some X amount for every cheque I write provided the bank pays me some Y amount for every ePayment that I'm unable to put through their telephone or website for no fault of mine viz. field length is too short to support the true size of the data element (e.g. beneficiary name); maintenance shutdown; inaccurate information, etc. Assuming X and Y are close to the respective costs incurred by each party, I'm very sure that I'll earn enough money from just one month of the latter to fund a lifetime of the former!