Editing Cheque (section)

== Usage ==
{{See also|#Cheques around the world}}[[File:Sweet success.jpg|250px|thumb|right|Cheques may be valid regardless of amount.]]Parties to regular cheques generally include a ''drawer'', the depositor writing a cheque; a ''drawee,'' the financial institution where the cheque can be presented for payment; and a ''payee,'' the entity to whom the drawer issues the cheque. The drawer ''drafts'' or ''draws'' a cheque, which is also called ''cutting a cheque'', especially in the US. There may also be a ''beneficiary''—for example, in depositing a cheque with a custodian of a brokerage account, the payee will be the custodian, but the cheque may be marked "F/B/O" ("for the benefit of") the beneficiary.

Ultimately, there is also at least one ''endorsee'' which would typically be the financial institution servicing the payee's account, or in some circumstances may be a third party to whom the payee owes or wishes to give money.

A payee that accepts a cheque will typically [[deposit account|deposit]] it in an account at the payee's bank, and have the bank process the cheque. In some cases, the payee will take the cheque to a branch of the drawee bank, and cash the cheque there. If a cheque is refused at the drawee bank (or the drawee bank returns the cheque to the bank that it was deposited at) because there are insufficient funds for the cheque to clear, it is said that the cheque has been ''[[Non-sufficient funds|dishonoured]]''. Once a cheque is approved and all appropriate accounts involved have been credited, the cheque is stamped with some kind of cancellation mark, such as a "paid" stamp. The cheque is now a ''cancelled cheque''. Cancelled cheques are placed in the account holder's file. The account holder can request a copy of a cancelled cheque as proof of a payment. This is known as the cheque clearing cycle.

Cheques can be lost or go astray within the cycle, or be delayed if further verification is needed in the case of suspected fraud. A cheque may thus bounce some time after it has been deposited.

[[File:110512-F-PO994-029 Annual Volunteer Recognition Ceremony 2011 Moody Air Force Base.jpg|250px|thumb|right|Symbolic cheques are used at events to depict money offered to the payee.]]
Following concerns about the amount of time it took the [[Cheque and Credit Clearing Company]] to clear cheques, the United Kingdom [[Office of Fair Trading]] set up a working group in 2006 to look at the cheque clearing cycle. Their report said that clearing times could be improved, but that the costs associated with speeding up the cheque clearing cycle could not be justified considering the use of cheques was declining.<ref name="OFT">{{cite web |title=Cheques Working Group Report |url=http://www.oft.gov.uk/shared_oft/reports/financial_products/oft868.pdf |publisher=The Office of Fair Trading |location=London |page=297 |date=November 2006 |access-date=26 May 2009 |url-status=dead |archive-url=https://web.archive.org/web/20090319173648/http://www.oft.gov.uk/shared_oft/reports/financial_products/oft868.pdf |archive-date=19 March 2009}}</ref> However, they concluded the biggest problem was the unlimited time a bank could take to dishonour a cheque. To address this, changes were implemented so that the maximum time after a cheque was deposited that it could be dishonoured was six days, what was known as the "certainty of fate" principle.

An advantage to the drawer of using cheques instead of [[debit card]] transactions is that they know the drawer's bank will not release the money until several days later. Paying with a cheque without adequate funds backing it and later making a deposit to the account on which the cheque is drawn in order to cover the cheque amount is called "[[check kiting|kiting]]" or "floating" and is generally illegal in the US, but applicable laws are rarely enforced unless the drawer uses multiple chequing accounts with multiple institutions to increase the delay or to steal funds.

=== Declining use ===
Cheque usage has been declining since the 1990s, both for [[point of sale]] transactions (for which [[credit card]]s, [[debit card]]s or [[Mobile payment|mobile payment apps]] are increasingly preferred) and for third party payments (for example, bill payments), where the emergence of telephone banking has accelerated the decline, [[online banking]], and [[mobile banking]]. Being paper-based, cheques are costly for banks to process in comparison to electronic payments, so banks in many countries now discourage the use of cheques, either by charging for cheques or by making the alternatives more attractive to customers. In particular, the handling of money transfers requires more effort and is time-consuming. The cheque has to be handed over in person or sent through mail. The rise of [[automated teller machine]]s (ATMs) means that small amounts of cash are often easily accessible, so that it is sometimes unnecessary to write a cheque for such amounts instead. A number of countries have announced or have already completed the end of cheques as a means of payment.<ref name="StuffNZ" /><ref name="ABC end" />

In October 2023, the average American wrote just over one check that month, according to the [[Federal Reserve Bank of Atlanta]]. The average value of these checks was $504, suggesting that most checks were used for larger purchases. This marks a significant decline from the year 2000 when Americans wrote an average of 60 checks annually.<ref>{{cite web | last=Chandler | first=Adam | title=It's never been more confusing to pay for something | website=Sherwood News | date=2024-09-11 | url=https://sherwood.news/personal-finance/american-payment-habits-cash-transactions/ | access-date=2024-09-12}}</ref>

==== Decline in Asia ====
In many Asian countries, cheques were never widely used and generally only used by the wealthy, with [[cash]] being used for the majority of payments except for India, where cheque usage was prevalent. Where cheques were used they have been declining rapidly.  By 2009 there was negligible consumer cheque usage in Japan, South Korea and [[Taiwan]]. This declining trend was accelerated by these developed markets advanced financial services infrastructure. Many of the developing countries in Asia have seen an increasing use of [[electronic payment]] systems, 'leap-frogging' the less efficient chequing system altogether.<ref>{{cite web |date=4 May 2010 |title='Green payment' movement set to impact the American payments landscape |url=http://blog.euromonitor.com/2010/05/green-payment-movement-set-to-impact-the-american-consumer-payments-landscape.html |access-date=24 July 2010 |publisher=euromonitor.com |archive-date=21 August 2010 |archive-url=https://web.archive.org/web/20100821153442/http://blog.euromonitor.com/2010/05/green-payment-movement-set-to-impact-the-american-consumer-payments-landscape.html |url-status=dead }}</ref>

==== Decline in Europe ====
In most European countries, cheques are now rarely used or have been completely phased out, even for third party payments except for the United Kingdom, France and Ireland. In most western European countries, it was standard practice for businesses to publish their bank details on invoices, to facilitate the receipt of payments by [[Giro (banking)|giro]]. Even before the introduction of online banking, it has been possible in some countries to make payments to third parties using ATMs, which may accurately and rapidly capture invoice amounts, due dates, and payee bank details via a bar code reader to reduce keying. In using a cheque, the onus is on the payee to initiate the payment, whereas with a giro transfer, the onus is on the payer to effect the payment. 

In the United Kingdom, France and Ireland cheques continued to be used as cheque payments were free for the consumer. However these countries have also seen significant declines since 2000. Since 2001, businesses in the United Kingdom made more electronic payments than cheque payments. The UK Payments Council announced in 2011 that cheques would continue as long as customers needed them reversing a previous target to phase out cheques by 2018.<ref>{{cite news |url=https://www.ft.com/content/2fc8b8ce-8dc0-4bad-90e1-79ea596c9e0b |title=Why cheques aren't quite dead yet |date=July 30, 2021 |publisher=Financial Times}}</ref>

France, remains well ahead of its European counterparts in the use of cheque payments, as seen in 2020 where it is estimated that more than 1 billion cheque payments were made, compared to Italy, the country with the next highest number of payments, with under 100 million.<ref>{{cite web |date=9 September 2021 |title=Total number of check payments in 27 countries in Europe from 2000 to 2020 |url=https://www.statista.com/statistics/443677/cashless-payment-with-checks-europe/ |access-date=17 September 2022}}</ref>

==== Decline in North America ====
The United States relied heavily on cheques, due to the convenience it affords payers, and due to the absence of a high volume system for low value electronic payments.<ref name="OECD1">{{cite book|editor=Organisation for Economic Co-operation and Development|editor-link=Organisation for Economic Co-operation and Development|title=The Future of Money|url=https://books.google.com/books?id=ym_bqY3UZG0C&dq=billion+checks&pg=PA76|year=2002|isbn=978-92-64-19672-8|pages=76–79|location=Paris|publisher=OECD}}</ref> In the US, an estimated 18.3 billion cheques were paid in 2012, with a value of $25.9 trillion.<ref>{{cite web|title=2013 Federal Reserve Payments Study|url=https://www.frbservices.org/communications/payment_system_research.html|website=Federal Reserve Bank Services|accessdate=8 July 2015|archive-url=https://web.archive.org/web/20150709101513/https://www.frbservices.org/communications/payment_system_research.html|archive-date=9 July 2015|url-status=dead|df=dmy-all}}</ref> However even in the United States cheque usage has seen significant decline.

Canada's usage of cheques is less than that of the US and is declining rapidly at the urging of the Canadian Banking Association.<ref>{{Cite web |url=http://www.cba.ca/b2b-mobile-payments |title=B2B and Mobile Payments: The Road Ahead &#124; B2B and Mobile Payments: The Road Ahead |access-date=17 January 2017 |archive-url=https://web.archive.org/web/20170118054145/http://www.cba.ca/b2b-mobile-payments |archive-date=18 January 2017 |url-status=dead |df=dmy-all }}</ref> The Government of Canada claims it is 6.5 times more expensive to mail a cheque than to make a direct deposit. The Canadian Payments Association reported that in 2012, cheque use in Canada accounted for only 40% of total financial transactions.<ref>{{cite web |title=Examining Canadian Payment Methods and Trends |date=October 2012 |url=http://www.cdnpay.ca/imis15/pdf/pdfs_publications/examining_canadian_payment_report_2012.pdf |publisher=Canadian Payment Association |access-date=24 October 2013 |archive-url=https://web.archive.org/web/20131029193311/http://www.cdnpay.ca/imis15/pdf/pdfs_publications/examining_canadian_payment_report_2012.pdf |archive-date=29 October 2013 |url-status=dead |df=dmy-all }}</ref>

==== Decline in Oceania ====
Both Australia and New Zealand were heavy users of cheques during the later part of the 20th century. However, following global trends both countries have seen significant decline in the use of cheques. 

In Australia, following global trends, the use of cheques continues to decline.  In 1994 the value of daily cheque transactions was A$25&nbsp;billion; by 2004 this had dropped to only A$5&nbsp;billion, almost all of this for [[Business-to-business|B2B transactions]]. Personal cheque use is practically non-existent thanks to the longstanding use of the [[EFTPOS]] system, [[BPAY]], electronic transfers, and debit cards. The Australian payment systems strategic plan has said it will remove cheques by 2030.<ref>{{cite web |url=https://www.commbank.com.au/articles/banking/are-australians-using-cheques.html |title=Are Australians still using cheques? |year=2022 |access-date=February 1, 2024}}</ref>

In New Zealand, payments by cheque have declined from the mid-1990s in favour of electronic payment methods. In 1993, cheques accounted for over half of transactions through the national banking system, with an annual average of 130 cheques per capita. By 2006, cheques lagged well behind [[EFTPOS]] ([[debit card]]) transaction and electronic credits, making up only nine per cent of transactions, an annual average of 41 cheque transactionz per capita.<ref>{{cite web|url=http://www.rbnz.govt.nz/markets_and_payment_operations/ |title= Payment and Settlement Systems in New Zealand |work= Reserve Bank of New Zealand |date = March 2008|accessdate= 2010-09-19}}</ref> Cheques were phased out completely in 2020 and no bank nor retailer accepts them in any form.

=== Alternatives to cheques ===

[[Payment system]]s other than cheques include:

# [[Cash]]
# [[Debit card]] payments
# [[Credit card]] payments
# [[Direct debit]] (initiated by payee)
# [[Direct credit]] (initiated by payer), [[Automated Clearing House|ACH]] in US, [[Giro (banking)|giro]] in Europe, [[Direct entry|Direct Entry]] in Australia
# [[Wire transfer]] (local and international) via banks and credit unions or else via major private vendors such as [[Western Union]] and [[MoneyGram]]
# [[Electronic bill payment]]s using [[Internet banking]]
# [[E-commerce payment system|Online payment services]], e.g. [[WeChat Pay]], [[Alipay]], [[PayPal]], [[Venmo]], [[Unified Payments Interface]], [[PhonePe]], and [[Paytm]] 
# [[Money orders]] or [[postal order]]s