7 June 2023

Modernising payments infrastructure by phasing out cheques

The Albanese Government will work to ensure Australians continue to have access to the payments services they require as the nation shifts away from the use of cheques.

The cheque system in Australia will wind down no later than 2030.

As part of the Strategic Plan for Australia’s Payments System released today, the Government has announced it will remove legislative and other requirements that entrench payment by cheques. We will also phase out government usage of cheques by the end of 2028.

As the use of cheques plummets and many banks and financial institutions stop issuing cheque books to new customers, it is important to manage this transition in an orderly and planned way.

The Government will work with industry to minimise adverse impacts to consumers and businesses and ensure vulnerable Australians have the assistance they need to switch to other payment methods.

We understand the change in payment methods that is already underway is difficult for some people, including older Australians, and some small businesses.

The seven-year transition plan will provide time for banks and financial institutions to assist their customers with the adjustment.

There has been an almost 90 per cent decline in the use of cheques in the last 10 years, with cheques now comprising only 0.2 per cent of non-cash retail payments in Australia.

As cheque use declines, the cost of supporting the cheque system will continue to increase. At the same time, many merchants are ceasing to accept cheques as a means of payment.

Other countries have already successfully managed the complete closure of their cheque systems.

The 2030 end date will be subject to further consultation with industry and stakeholders to determine the feasibility of this timing and an appropriate transition plan.

The Government will work with states and territories, industry and the broader community to encourage a coordinated approach to transitioning away from the cheques system.

We will also make changes to Commonwealth legislation that require the use and acceptance of cheques.

The Government will consult further this year with stakeholders on the challenges of retiring the cheque system and ensure all Australians are adequately supported.

This change is part of the Albanese Government’s commitment to ensure we have a modern, competitive and efficient financial system that delivers for the Australian economy and the Australian people.