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An early exit for cheque guarantee cards

September 22, 2009 by admin  
Filed under News, News-Credit-Cards

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It has been revealed that cheque guarantee cards in the UK are set to disappear from the system earlier than expected, with come customers from Abbey losing their cheque guarantee facility on debit cards from as early as next month.

It had been announced by the Payment Council that cheque guarantee facilities on debit cards would be withdrawn by around the middle of 2011.

The use of cheques has been declining in the UK, partly as a result of many retailers now refusing to take cheques as a payment method.

There are concerns, however, that some industry sectors could be put at increased risk by the withdrawal of these cheque guarantee facilities.

For instance, one report highlighted the risk to sole and independent traders who have always relied on these guarantees to ensure that the payment that they receive from customers goes through. The Payments Council, however, has indicated that banks have already started to do away with debit cards that come with a cheque guarantee facility.

One official from the Payment Council said: ‘We became aware that there were less cheque guaranteed debit cards in circulation and that this caused a problem for those accepting the cards during payments. For instance, if some were guaranteed and others weren’t, people might get confused and think they were all able to guarantee cheques. The reason why we brought in this concerted withdrawal was to make it much simpler for everyone.’

The Payments Council has indicated that there will be alternative measures in place to protect sole traders by the middle of 2011, but until that time they would have to ask for cash or card payments or take the risk of the cheque bouncing if there is no cheque guarantee card available.

Tags: Payment Council, instance, cheque cards, cheque guarantee cards, place, finance, cheques, alternative measures

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