Electronic Cheques should be easy to implement in an online banking infrastructure.
The debitor logs in and creates a new cheque. Amount, "pay to the order of", "for" and expiry-date are filled out as well as an e-mail address for the creditor. Perhaps also a password.
The bank emails the creditor saying that there's a cheque for him, tells him to click the link. He's prompted for the password, and asked to provide the account for the money to be transferred into. Once he confirms, a regular bank transfer is set up, and at the same time the recipient gets a confirmation that there is coverage for the cheque.
The final check could be that the debitor bank queries the creditor bank to confirm that the account is in the name of the creditor.
This procedure allows you to "cut a check" in advance for a business meeting. The e-mail arriving is like putting the money in escrow. When you sign the contract, you give the creditor the password, and that completes the transaction. If not, just wait for the expiry-date and the money is out of escrow.
That sounds extremely complicated. I don't see the need to emulate checks electronically, when there are good solutions today.
Scandinavian business and personal users have no problems with transferring money using online banks. You can even get the invoice electronically and just click a button to pay it, and the amount will be automatically transferred at the due date. I have heard rumors that checks are sometimes used in B2B, but I expect it to be in a very limited set of cases.
I remember some old people who used checks in the stores when I was a kid (many, many years ago), but I doubt the stores would even know what to do with a check if they were given one.
Edit: I did a search and found an article from 2006. The newspaper suggested that people should have a check book in case of problems with the electronic system (many don't carry much in cash). They interviewed the CEO of a major bank, and he wasn't even sure that the bank gave out check books at all :-)
A suitable XML schema for digitally signed cheques would work though, provided that it was thought out properly. It wouldn't even need live Internet connectivity.
However, this still leaves those instances where a computer is not necessarily available.
I'm from the US, never really liked checks, and then moved to Holland (where they simply do not exist) and was amazed.
You have 4 ways to pay for things:
* Transfer from your online banking. You need the other party's account number, their name, and city. It's free for both parties; instantaneous (money is no longer available to your account, and is immediately available to the other party); can't be done if you don't have a high enough balance (no bounced checks); and can be set to be recurring. It makes the US checks/fees/delays look like a joke, but doesn't provide 10 different revenue streams for the banks.
* You can use your debit card (called pinnen or 'PIN-ing') at any stores that have a scanner. There are no fees, you have to enter your pin. Most places (supermarkets, restaurants) will let you PIN, but don't take credit cards. Like transferring money, charges are immediate, done in the order they are received, and don't go through if there's not enough money.
* All debit cards have a little smart chip on them, which can be used to 'ChipKnip'. You load small amounts of money directly onto your chip, and you can now use your card to pay for small things (parking meters, printers at a university, etc). It's insecure (no PIN required) and if you loose your card the money's gone. It also (I think...) doesn't require a live connection to the ATM network, so transactions can be run later
* Giro. Giro is the opposite of a check (it's a credit-transfer instead of a debt-transfer). Sometimes bills are sent with a GIRO slip, which the payer fills out and eventually makes it way to the payer's bank, where a transfer is initiated to the recipient. I've never used a GIRO in the 2+ years I've been here.
I don't get it, according to the figures in 2017 we'll be down to 300 million cheques a year, which is roughly 4 cheques per year per person in the UK.
That's still a pretty high number in my book given that a lot of them will be for large money amounts.
I'm over 30 and I have never owned a checkbook. Checks are backwards, insecure and prone to abuse with no real guarantee for whoever gets one that he will actually get money, which makes them even more worthless.
If I were a bank I would do everything in my power to get rid of checks pronto.
[+] [-] mseebach|16 years ago|reply
The debitor logs in and creates a new cheque. Amount, "pay to the order of", "for" and expiry-date are filled out as well as an e-mail address for the creditor. Perhaps also a password.
The bank emails the creditor saying that there's a cheque for him, tells him to click the link. He's prompted for the password, and asked to provide the account for the money to be transferred into. Once he confirms, a regular bank transfer is set up, and at the same time the recipient gets a confirmation that there is coverage for the cheque.
The final check could be that the debitor bank queries the creditor bank to confirm that the account is in the name of the creditor.
This procedure allows you to "cut a check" in advance for a business meeting. The e-mail arriving is like putting the money in escrow. When you sign the contract, you give the creditor the password, and that completes the transaction. If not, just wait for the expiry-date and the money is out of escrow.
[+] [-] qw|16 years ago|reply
Scandinavian business and personal users have no problems with transferring money using online banks. You can even get the invoice electronically and just click a button to pay it, and the amount will be automatically transferred at the due date. I have heard rumors that checks are sometimes used in B2B, but I expect it to be in a very limited set of cases.
I remember some old people who used checks in the stores when I was a kid (many, many years ago), but I doubt the stores would even know what to do with a check if they were given one.
Edit: I did a search and found an article from 2006. The newspaper suggested that people should have a check book in case of problems with the electronic system (many don't carry much in cash). They interviewed the CEO of a major bank, and he wasn't even sure that the bank gave out check books at all :-)
[+] [-] rlpb|16 years ago|reply
http://en.wikipedia.org/wiki/Non-repudiation
A suitable XML schema for digitally signed cheques would work though, provided that it was thought out properly. It wouldn't even need live Internet connectivity.
However, this still leaves those instances where a computer is not necessarily available.
[+] [-] furyg3|16 years ago|reply
You have 4 ways to pay for things:
* Transfer from your online banking. You need the other party's account number, their name, and city. It's free for both parties; instantaneous (money is no longer available to your account, and is immediately available to the other party); can't be done if you don't have a high enough balance (no bounced checks); and can be set to be recurring. It makes the US checks/fees/delays look like a joke, but doesn't provide 10 different revenue streams for the banks.
* You can use your debit card (called pinnen or 'PIN-ing') at any stores that have a scanner. There are no fees, you have to enter your pin. Most places (supermarkets, restaurants) will let you PIN, but don't take credit cards. Like transferring money, charges are immediate, done in the order they are received, and don't go through if there's not enough money.
* All debit cards have a little smart chip on them, which can be used to 'ChipKnip'. You load small amounts of money directly onto your chip, and you can now use your card to pay for small things (parking meters, printers at a university, etc). It's insecure (no PIN required) and if you loose your card the money's gone. It also (I think...) doesn't require a live connection to the ATM network, so transactions can be run later
* Giro. Giro is the opposite of a check (it's a credit-transfer instead of a debt-transfer). Sometimes bills are sent with a GIRO slip, which the payer fills out and eventually makes it way to the payer's bank, where a transfer is initiated to the recipient. I've never used a GIRO in the 2+ years I've been here.
[+] [-] tptacek|16 years ago|reply
[+] [-] ErrantX|16 years ago|reply
[+] [-] axod|16 years ago|reply
I won't miss them.
[+] [-] mattmanser|16 years ago|reply
That's still a pretty high number in my book given that a lot of them will be for large money amounts.
[+] [-] axod|16 years ago|reply
[+] [-] trezor|16 years ago|reply
If I were a bank I would do everything in my power to get rid of checks pronto.
[+] [-] s3graham|16 years ago|reply
Not that I disagree with ditching them, of course.
[+] [-] anApple|16 years ago|reply