Death of the cheque in five years

Cheque use plummeted by 66 per cent in the 10 years to December. Picture: Thinkstock Source: Supplied

THE cheque has one foot in the grave with predictions it could be killed off within just five years.

It has raised fears the move could result in a repeat of the massive backlash that resulted in the UK and saw the decision to ban cheques overturned.

The Australian Payments and Clearing Association's Milestones Report released today showed cheque use plummeted by 66 per cent in the 10 years to December.

The report stated it was only a matter of time before the downhill shift saw cheques wiped out completely.

''Based on the current rate of decline and assuming no plateau in cheque use, it could be predicted that cheques will no longer be used in Australia in 2018,'' the report stated.

But a similar move in the UK to ban cheques by October 2018 provided disastrous and strategic business relations company RFi's director, Alan Shields said it resulted in a complete backflip.

''You have to look at what happened in the UK, the UK Payments Council said they were getting rid of cheques but there was such a backlash they had to do a 180,'' he said.

''They wouldn't want to go down the same road as the UK.''

The UK Payments Council postponed its decision in 2011 to ban cheques following significant outrage and announced, ''cheques will continue for as long as customers need them.''

Mr Shields said the death of the cheque would be inevitable if businesses started to turn away cheques.

''It's going to be contingent on people accepting cheques, if they stop accepting cheques then that's going to be the biggest nail in the coffin,'' he said.

''The people that use them are a minority but it's not going to be an easy drug to kick.''

APCA's report found between December 2011 and December 2012 the total number of cheques written fell by 12.5 per cent from 256 million to 224 million per year.

APCA chief executive Chris Hamilton said the dramatic shift away from cheque use forced its future to be seriously questioned.

''There's a lot of nostalgia, there's lot of history associated with cheques . . . but they really are quite expensive as a payment medium,'' he said.

''As people find good electronic alternatives and as they live more of their lives online and electronically then the cheque is just less useful.

''This is a product that's gradually phasing itself out, our biggest concern in all of that is there are still some people including older Australians or for historical reasons those people that are still very attached to their cheques.''

The report said cheques volumes had fallen across the world with data compiled from 19 developed countries including Australia and found volumes fell from 34 billion in 2010 to 31.6 billion in 2011.
 

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Death of the cheque in five years

Cheque use plummeted by 66 per cent in the 10 years to December. Picture: Thinkstock Source: Supplied

THE cheque has one foot in the grave with predictions it could be killed off within just five years.

It has raised fears the move could result in a repeat of the massive backlash that resulted in the UK and saw the decision to ban cheques overturned.

The Australian Payments and Clearing Association's Milestones Report released today showed cheque use plummeted by 66 per cent in the 10 years to December.

The report stated it was only a matter of time before the downhill shift saw cheques wiped out completely.

''Based on the current rate of decline and assuming no plateau in cheque use, it could be predicted that cheques will no longer be used in Australia in 2018,'' the report stated.

But a similar move in the UK to ban cheques by October 2018 provided disastrous and strategic business relations company RFi's director, Alan Shields said it resulted in a complete backflip.

''You have to look at what happened in the UK, the UK Payments Council said they were getting rid of cheques but there was such a backlash they had to do a 180,'' he said.

''They wouldn't want to go down the same road as the UK.''

The UK Payments Council postponed its decision in 2011 to ban cheques following significant outrage and announced, ''cheques will continue for as long as customers need them.''

Mr Shields said the death of the cheque would be inevitable if businesses started to turn away cheques.

''It's going to be contingent on people accepting cheques, if they stop accepting cheques then that's going to be the biggest nail in the coffin,'' he said.

''The people that use them are a minority but it's not going to be an easy drug to kick.''

APCA's report found between December 2011 and December 2012 the total number of cheques written fell by 12.5 per cent from 256 million to 224 million per year.

APCA chief executive Chris Hamilton said the dramatic shift away from cheque use forced its future to be seriously questioned.

''There's a lot of nostalgia, there's lot of history associated with cheques . . . but they really are quite expensive as a payment medium,'' he said.

''As people find good electronic alternatives and as they live more of their lives online and electronically then the cheque is just less useful.

''This is a product that's gradually phasing itself out, our biggest concern in all of that is there are still some people including older Australians or for historical reasons those people that are still very attached to their cheques.''

The report said cheques volumes had fallen across the world with data compiled from 19 developed countries including Australia and found volumes fell from 34 billion in 2010 to 31.6 billion in 2011.
 

View the original article here

SLUGGED: Home loans double in 10 years

Australians have felt the impacts of rising property prices on their repayments. Source: Supplied

AVERAGE mortgage repayments have leapt by 105 per cent over the past decade but wage increases have failed to keep up.

Australians are putting much larger chunks of their budgets towards meeting their home loan costs than they were 10 years ago - some states have seen repayments climb by up to 152 per cent.

Wages rose by 54.5 per cent and inflation has climbed by 31.4 per cent.

Australian Bureau of Statistics data and figures compiled by financial services company Canstar compared average home loans over 25 years, based on the average interest of today's big four banks at 6.42 per cent.

In NSW the average loan size in 2002 was $212,400 but has risen to $341,800 resulting in the average monthly repayment increasing by 61 per cent to $2295.

In Victoria the average loan rose from $175,900 to $306,500 and repayments increased by 74 per cent to $2058.

In Queensland the loan size rose from $152,700 to $289,900 and the average repayments climbed by 90 per cent to $1946.

In South Australia loans rose from $124,900 to $249,400 and repayments increased by 100 per cent to $1674.

In Western Australia the average loan rose from $141,000 to $302,500 and repayments increased by 115 per cent to $2031.

In Tasmania the average loan rose from $94,800 to $218,100 and repayments increased by 130 per cent to $1464.

In the Northern Territory the average loan increased from $133,500 to $337,000 and repayments increased by 152 per cent to $2262.

In the ACT the average loan rose by $160,500 to $350,700 and repayments increased by 119 per cent to $2354.

Canstar analyst Mitchell Watson said Australians had felt the impacts of rising property prices on their repayments.

''Housing prices have increased and we've seen a direct impact on the amount which people need to borrow to purchase those homes which in turn has dramatically increased their loan repayments,'' he said.

''People need to be savvy both in their property choice, ensuring they are sticking to a property within their means.

''Wages haven't increased as much as property prices have which means a property you may have purchased back in 2002 may be out of your reach.''

NT experienced the biggest spike in loan monthly repayment sizes rising from $896 to $1366 (152 per cent) over 10 years, followed by Tasmania (130 per cent), ACT (119 per cent), WA (115 per cent), SA (100 per cent), Qld (90 per cent), Vic (74 per cent) and NSW (61 per cent).

AMP chief economist Dr Shane Oliver said the nation's rapid accumulation of debt has resulted in households spending more on mortgage repayments.

''Australians have taken on more debt and that has been in order to pay more for houses and they've ended up with bigger mortgages than we did in 2002,'' he said.

''The household sector has found various ways to deal with that partly by squeezing down on other areas and also working longer hours.''

Mortgage Choice spokeswoman Belinda Williamson said it was crucial mortgage holders made sure they were comfortable with their regular home loan repayments.

''Current and potential mortgage holders, who want to ensure they continue to meet and feel comfortable with their home loan repayments, should be realistic about their level of borrowings and regularly review their repayment strategy,'' she said. 

View the original article here

SLUGGED: Home loans double in 10 years

Australians have felt the impacts of rising property prices on their repayments. Source: Supplied

AVERAGE mortgage repayments have leapt by 105 per cent over the past decade but wage increases have failed to keep up.

Australians are putting much larger chunks of their budgets towards meeting their home loan costs than they were 10 years ago - some states have seen repayments climb by up to 152 per cent.

Wages rose by 54.5 per cent and inflation has climbed by 31.4 per cent.

Australian Bureau of Statistics data and figures compiled by financial services company Canstar compared average home loans over 25 years, based on the average interest of today's big four banks at 6.42 per cent.

In NSW the average loan size in 2002 was $212,400 but has risen to $341,800 resulting in the average monthly repayment increasing by 61 per cent to $2295.

In Victoria the average loan rose from $175,900 to $306,500 and repayments increased by 74 per cent to $2058.

In Queensland the loan size rose from $152,700 to $289,900 and the average repayments climbed by 90 per cent to $1946.

In South Australia loans rose from $124,900 to $249,400 and repayments increased by 100 per cent to $1674.

In Western Australia the average loan rose from $141,000 to $302,500 and repayments increased by 115 per cent to $2031.

In Tasmania the average loan rose from $94,800 to $218,100 and repayments increased by 130 per cent to $1464.

In the Northern Territory the average loan increased from $133,500 to $337,000 and repayments increased by 152 per cent to $2262.

In the ACT the average loan rose by $160,500 to $350,700 and repayments increased by 119 per cent to $2354.

Canstar analyst Mitchell Watson said Australians had felt the impacts of rising property prices on their repayments.

''Housing prices have increased and we've seen a direct impact on the amount which people need to borrow to purchase those homes which in turn has dramatically increased their loan repayments,'' he said.

''People need to be savvy both in their property choice, ensuring they are sticking to a property within their means.

''Wages haven't increased as much as property prices have which means a property you may have purchased back in 2002 may be out of your reach.''

NT experienced the biggest spike in loan monthly repayment sizes rising from $896 to $1366 (152 per cent) over 10 years, followed by Tasmania (130 per cent), ACT (119 per cent), WA (115 per cent), SA (100 per cent), Qld (90 per cent), Vic (74 per cent) and NSW (61 per cent).

AMP chief economist Dr Shane Oliver said the nation's rapid accumulation of debt has resulted in households spending more on mortgage repayments.

''Australians have taken on more debt and that has been in order to pay more for houses and they've ended up with bigger mortgages than we did in 2002,'' he said.

''The household sector has found various ways to deal with that partly by squeezing down on other areas and also working longer hours.''

Mortgage Choice spokeswoman Belinda Williamson said it was crucial mortgage holders made sure they were comfortable with their regular home loan repayments.

''Current and potential mortgage holders, who want to ensure they continue to meet and feel comfortable with their home loan repayments, should be realistic about their level of borrowings and regularly review their repayment strategy,'' she said. 

View the original article here