Editing Cheque (section)

== History ==
{{Broader|History of banking}}
The cheque had its origins in the ancient banking system, in which bankers would issue orders at the request of their customers, to pay money to identified payees. Such an order was referred to as a ''[[Negotiable instrument#Bill of exchange|bill of exchange]]''. The use of bills of exchange facilitated trade by eliminating the need for merchants to carry large quantities of currency (for example, gold) to purchase goods and services.

=== Early years ===

There is early evidence of using bill of exchange. In India, during the [[Maurya Empire]] (from 321 to 185 BC), a commercial instrument called the adesha was in use, which was an order on a banker desiring him to pay the money of the note to a third person.<ref>{{Cite web |date=12 December 1998 |title=Publications |url=https://m.rbi.org.in/Scripts/PublicationsView.aspx?id=155 |url-status=live |archive-url=https://web.archive.org/web/20190120043055/https://m.rbi.org.in/Scripts/PublicationsView.aspx?id=155 |archive-date=20 January 2019 |access-date=17 May 2022 |publisher=Reserve Bank of India}}</ref>

The ancient Romans are believed to have used an early form of cheque known as ''praescriptiones'' in the 1st century BC.<ref name="Durant">{{cite book|last=Durant|first=Will|title=Caesar and Christ : a history of Roman civilization and of Christianity from their beginnings to A.D. 325|series=The story of civilization|volume=3|year=1944|publisher=Simon & Schuster|location=New York|page=749}}</ref>{{ISBN missing|date=May 2022}}

Beginning in the third century AD, banks in [[Sassanid Empire|Persian]] territory began to issue letters of credit.<ref>{{cite journal |last1=Safari |first1=Meysam |year=2013 |title=Contractual structures and payoff patterns of Sukūk securities |url=http://e-journal.uum.edu.my/index.php/ijbf/article/download/8475/1420 |format=PDF |journal=International Journal of Banking and Finance |volume=10 |issue=2 |doi=10.32890/ijbf2013.10.2.8475 |ssrn=2386365 |s2cid=155043129 |quote=During the 3rd century AD, financial firms in Persia (currently known as Iran) and other territories in the Persian Sassanid Dynasty issued letters of credit known as "chak"|doi-access=free }}</ref> These letters were termed ''čak'', meaning "document" or "contract".<ref>Ilya Yakubovich. (2012). Journal of the American Oriental Society, 132(1), 116. {{doi|10.7817/jameroriesoci.132.1.0116}}</ref> The ''čak'' became the ''sakk'' later used by traders in the [[Abbasid Caliphate]] and other Arab-ruled lands.<ref name="glubb">{{cite book |title=A Short History of the Arab Peoples |first=John Bagot |last=Glubb |publisher=Dorset Press |year=1988 |page=105 |isbn=978-0-88029-226-9 |oclc=603697876}}</ref> Transporting a paper ''sakk'' was more secure than transporting money. In the ninth century, a merchant in one country could cash a ''sakk'' drawn on his bank in another country.<ref name="Islamic inventions 17">{{cite web |date=11 March 2006 |title=How Islamic inventors changed the world |url=https://www.independent.co.uk/news/science/how-islamic-inventors-changed-the-world-469452.html |url-status=dead |archive-url=https://web.archive.org/web/20080517055128/http://www.independent.co.uk/news/science/how-islamic-inventors-changed-the-world-469452.html |archive-date=17 May 2008 |access-date=29 July 2015 |work=The Independent}}</ref> The Persian poet, Ferdowsi, used the term "cheque" several times in his famous book, Shahnameh, when referring to the Sasanid dynasty.

[[Ibn Hawqal]], living in the 10th century, records the use of a cheque  written in [[Aoudaghost]] which was worth 42,000 [[dinars]].<ref>{{cite book |url=https://books.google.com/books?id=lhyX6Dp8pnMC&q=Ibn+Hawqal+cheques+at+Ghana+Empire&pg=PA14 |last1= Krätli |first1= Graziano |first2= Ghislaine |last2= Lydon |year=2011 |title= The Trans-Saharan Book Trade: Manuscript Culture, Arabic Literacy and Intellectual History in Muslim Africa |publisher=[[Brill Publishers]] |isbn= 9789004187429 }}</ref><ref>{{cite journal | last=Levtzion
| first= Nehemia|author-link=Nehemia Levtzion|title=Ibn-Hawqal, the Cheque, and Awdaghost| journal=[[The Journal of African History]]|volume=9|issue=2 |pages=223–333| year=1968|doi=10.1017/S0021853700008847|jstor=179561|s2cid=162076182}}</ref> 

In the 13th century the ''bill of exchange'' was developed in [[Venice]] as a legal device to allow international trade without the need to carry large amounts of gold and silver. Their use subsequently spread to other European countries.

In the early 1500s, to protect large accumulations of cash, people in the [[Financial history of the Dutch Republic|Dutch Republic]] began depositing their money with "cashiers". These cashiers held the money for a fee. Competition drove cashiers to offer additional services including paying money to any person bearing a written order from a depositor to do so. They kept the note as proof of payment. This concept went on to spread to England and elsewhere.<ref>{{cite web |year=2003 |title=Guide to Checks and Check Fraud |url=https://www.wachovia.com/file/checks_and_check_fraud.pdf |url-status=dead |archive-url=https://web.archive.org/web/20110928041645/https://www.wachovia.com/file/checks_and_check_fraud.pdf |archive-date=28 September 2011 |publisher=[[Wachovia Bank]] |page=4}}</ref>

=== Modern era ===
[[File: Barclays and Co. cheque. For 39 pounds, 4 shillings, and 2 pence. Issued in London by Messrs Barclay and Tritton, 1793. On display at the British Museum in London.jpg|thumb|Barclays and Co. cheque for 39 pounds, 4 shillings, and 2 pence, issued in London by Messrs Barclay and Tritton, 1793, on display at the British Museum in London]]
By the 17th century, bills of exchange were being used for domestic payments in England. Cheques, a type of bill of exchange, then began to evolve. Initially, they were called ''drawn notes'', because they enabled a customer to draw on the funds that he or she had in the account with a bank and required immediate payment. These were handwritten, and one of the earliest known still to be in existence was drawn on Messrs Morris and Clayton, [[scrivener]]s and bankers based in the [[City of London]], and dated 16 February 1659.<ref>{{cite web |author=Cheque and Credit Clearing Company |year=2009 |title=Cheques and cheque clearing: An historical perspective |url=https://www.chequeandcredit.co.uk/sites/default/files/cheques_and_cheque_clearing_an_historical_perspective_0.pdf |url-status=dead |archive-url=https://web.archive.org/web/20200520153043/https://www.chequeandcredit.co.uk/sites/default/files/cheques_and_cheque_clearing_an_historical_perspective_0.pdf |archive-date=20 May 2020 |access-date=19 June 2010 |page=2}}</ref>

In 1717, the [[Bank of England]] pioneered the first use of a pre-printed form. These forms were printed on "cheque paper" to prevent fraud, and customers had to attend in person and obtain a numbered form from the cashier. Once written, the cheque was brought back to the bank for settlement. The [[Bank Restriction Act 1797|suppression of banknotes]] in eighteenth-century England further promoted the use of cheques.<ref>[https://web.archive.org/web/20120710073720/http://www.frbatlanta.org/filelegacydocs/er08no4_QuinnRoberds.pdf Federal Reserve Bank of Atlanta, ''The Evolution of the cheque as a Means of Payment: A Historical Survey'', 2008]. </ref>

Until about 1770, an informal exchange of cheques took place between London banks. Clerks of each bank visited all the other banks to exchange cheques while keeping a tally of balances between them until they settled with each other. Daily [[cheque clearing]] began around 1770 when the bank clerks met at the Five Bells, a tavern in [[Lombard Street, London|Lombard Street]] in the City of London, to exchange all their cheques in one place and settle the balances in cash. This was the first [[bankers' clearing house]].

Provincial clearinghouses were established in major cities throughout the UK to facilitate the clearing of cheques on banks in the same town. Birmingham, Bradford, Bristol, Hull, Leeds, Leicester, Liverpool, Manchester, Newcastle, Nottingham, Sheffield, and Southampton all had their own clearinghouses.<ref>[https://www.archive.barclays.com/items/show/5421 ''History of Cheques''] {{Webarchive|url=https://web.archive.org/web/20200727203708/https://www.archive.barclays.com/items/show/5421 |date=27 July 2020 }} - Barclays, 2020</ref>

In America, the Bank of New York began issuing cheques after its establishment by Alexander Hamilton in 1784.<ref>{{cite web|url=https://archive.org/stream/historyofbankofn00dome#page/48/mode/2up |title=Domett, Henry Williams. ''A history of the Bank of New York, 1784-1884'' (1884) |date=2010-07-21 |access-date=2018-01-23}}</ref> The oldest surviving example of a complete American chequebook from the 1790s was discovered by a family in New Jersey. The documents are in some ways similar to modern-day cheques, with some data pre-printed on sheets of paper alongside blank spaces for where other information could be hand-written as needed.<ref>{{cite web |date=2014-07-12 |title=Newly Discovered Oldest Surviving American chequebook |url=http://www.rarebookbuyer.com/webuyoldbooks/newly-discovered-oldest-surviving-american-checkbook/ |url-status=live |archive-url=https://web.archive.org/web/20151226155207/http://rarebookbuyer.com/webuyoldbooks/newly-discovered-oldest-surviving-american-checkbook/ |archive-date=26 December 2015 |access-date=2018-01-23 |website=rarebookbuyer.com}}</ref>

It is thought that the [[Commercial Bank of Scotland]] was the first bank to personalize its customers' cheques, in 1811, by printing the name of the account holder vertically along the left-hand edge. In 1830 the [[Bank of England]] introduced books of 50, 100, and 200 forms and counterparts, bound or stitched. These ''cheque books'' became a common format for the distribution of cheques to bank customers.

In the late 19th century, several countries formalized laws regarding cheques. The UK passed the [[Bills of Exchange Act 1882]], and India passed the [[Negotiable Instruments Act, 1881]];<ref name="rbi.org.in">{{cite web |date=12 December 1998 |title=Evolution of Payment Systems in India |url=http://www.rbi.org.in/scripts/PublicationsView.aspx?id=155 |url-status=dead |archive-url=https://web.archive.org/web/20060427055059/http://www.rbi.org.in/scripts/PublicationsView.aspx?id=155 |archive-date=27 April 2006 |website=www.rbi.org.in}}</ref> which both covered cheques.

[[File: English 1956 Westminster Bank cheque of Doris Ogilvie.jpg|thumb|right|280px|An English cheque from 1956 having a bank clerk's red mark verifying the signature, a two-pence stamp duty, and holes punched by hand to cancel it. This is a "crossed cheque" disallowing the transfer of payment to another account.]]

In 1931, an attempt was made to simplify the international use of cheques by the Geneva Convention on the Unification of the Law Relating to Cheques.<ref>{{cite web |year=1966 |title=1 - Progressive Development of the Law of International Trade: Report of the Secretary-General of the United Nations, 1966 |url=http://www.jus.uio.no/lm/un.sg.report.itl.development.1966/1.html |url-status=live |journal= |publisher=www.jus.uio.no |archive-url=https://web.archive.org/web/20100914023506/https://www.jus.uio.no/lm/un.sg.report.itl.development.1966/1.html |archive-date=14 September 2010 |access-date=29 July 2015}}</ref> Many European and South American states, as well as Japan, joined the convention. However, countries including the US and members of the [[Commonwealth of Nations|British Commonwealth]] did not participate and so it remained very difficult for cheques to be used across country borders.

In 1959 a standard for machine-readable characters ([[MICR]]) was agreed upon and patented in the US for use with cheques. This opened the way for the first automated reader/sorting machines for clearing cheques. As automation increased, the following years saw a dramatic change in the way in which cheques were handled and processed. Cheque volumes continued to grow; in the late 20th century, cheques were the most popular non-[[cash]] method for making payments, with billions of them processed each year. Most countries saw cheque volumes peak in the late 1980s or early 1990s, after which electronic payment methods became more popular and the use of cheques declined.

In 1969 [[cheque guarantee card]]s were introduced in several countries, allowing a retailer to confirm that a cheque would be honored when used at a [[point of sale]]. The drawer would sign the cheque in front of the retailer, who would compare the signature to the signature on the card and then write the cheque-guarantee-card number on the back of the cheque. Such cards were generally phased out and replaced by [[debit cards]], starting in the mid-1990s.

From the mid-1990s, many countries enacted laws to allow for [[cheque truncation]], in which a physical cheque is converted into electronic form for transmission to the paying bank or clearing-house. This eliminates the cumbersome physical presentation and saves time and processing costs.

In 2002, the [[Eurocheque]] system was phased out and replaced with domestic clearing systems. Old Eurocheques could still be used, but they were now processed by national clearing systems. <!-- Some European countries phased out the use of cheques altogether when the [[Eurocheque]] system, which they had used as their domestic cheque-clearing system, ceased on 1 January 2002. --> At that time, several countries took the opportunity to phase out the use of cheques altogether. As of 2010, many countries have either phased out the use of cheques altogether or signaled that they would do so in the future.