So when did you last use one? Cheques head for the shredder

Can you recall the last time you carried your dog-eared chequebook around with you and whipped it out to make a purchase at a till? Maybe it was just too long ago to remember.

Cheques seem to be on their last legs, and many people are predicting that this form of payment, dating back to 1642, could be heading for extinction.

In 2005, the Halifax predicted that if cheques continued to decline, they would be gone by 2025. Some are now saying the end could come a lot sooner.

At the start of this month, high-street chemist Boots called a halt to payments by cheque at around 1,500 of its stores in the UK and Ireland. It joined a growing band of companies that have restricted, or banned, the use of cheques.

The move by Boots followed a three-month trial in its stores in Surrey and Sussex at the end of last year to gauge customer response. This, according to the company, was "positive".

"With the success of our trial and the fact that only 0.1 per cent of all purchases are by cheque, we have decided to follow in the path of other retailers," says a spokeswoman.

Other firms that have already made the move include Shell, which stopped accepting cheques at several hundred forecourts in 2005, as well as Next, Currys and PC World, reports consumer body Which?.

Tesco is currently running a trial in a "handful" of stores "to understand whether customers continue to find this payment method useful", while Sainsbury's says it is "constantly reviewing" its policy. Asda has also carried out pilots using cash and plastic only.

So could this really be the death of cheques?

Their peak year, according to payment body Apacs, was 1990, when people wrote out 11 million cheques every day. By 2005 - the year for which the most up-to-date figures are available - that daily number had dropped to 5.3 million.

Further findings from Visa show that cheques accounted for little more than 2 per cent of UK retail turnover in 2006.

"Both individuals and businesses are shifting away from cheques and opting for more convenient and cost-effective means of making and receiving payments, including plastic cards or automated payments," says Jemma Smith at Apacs. "This has been principally consumer-led, as people now favour debit cards over cheques on the high street, and direct debits, internet and telephone banking to pay household bills."

She says that people simply do not carry around their chequebook any more. "While we are not predicting the end of the cheque, the longer-term view is for further decline," she says. "We have seen usage fall 40 per cent over the last decade and certainly the demise of the cheque on the high street is well under way. This has been helped by chip and pin, and the fact we are a nation of plastic lovers."

This trend, she adds, has been given a push by retailers, which argue that cheques bring extra costs and a greater risk of fraud.

Jos San Juan from Visa is, unsurprisingly, also quick to point out the downsides of cheques. "For retailers, they are costly to process and increase queue times at checkouts.

"Our research shows that in 2005-06, cheques cost UK retailers more than [pound]104m in areas such as extra transaction times, extra queues, back-office handling costs and fraud linked to cheques."

He adds: "Having invested in initiatives like chip and pin, retailers are beginning to see just how important card payments are going to be for the future of their businesses.

"Cheques are fast becoming an obsolete method of payment."

Further findings from Apacs reveal that people now write less than two cheques a month, and receive less than seven a year. But talk of decline and death is tempered by Which?. The consumer body insists that cheques are still widely used to pay smaller firms such as plumbers and builders - a view shared by the Federation of Small Businesses. "A large proportion of our members still deal in cheques," says a spokesman. "They shouldn't be pe-nalised for that and should be able to carry on."

Ms Smith from Apacs adds that people still write cheques for "person-to-person" payments such as birthday gifts, as well as for repaying credit card bills.

Further to this, cheques are also popular with the older generation, and pensioner groups have raised concerns over outright bans. "Many pensioners do not like the new chip-and-pin technology and are comfortable using cheques as it helps them keep track of their spending," says Paul Bates from Help the Aged. Apacs points out that there are big changes ahead in payments, including the introduction later this year of a card that can be reloaded with cash for use online and over the phone. "This is likely to exacerbate the move away from cheques," adds Ms Smith.

Apacs forecasts that, by 2015, cheques will be used for less than 1 per cent of retail transactions. It also predicts that only one in 20 bills will be paid by cheque - against one in three in 1995 and one in seven today.

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