Cheques tipped to disappear entirely in Australia by the end of 2019

Cheques are about to become a thing of the past. Photo / 123RF

The days of receiving a birthday cheque in the mail from grandma will soon be over.

Because a new forecast of cheque usage data by comparison site finder.com.au has found cheques could become completely extinct in Australia within two years.

After analysing RBA data, the site found if current usage trends continue, the humble cheque book will disappear entirely by the end of 2019.

The number of customer cheques processed in Australia each month has dropped from 45,900 in January 2012 to just 6549 in October 2017.

The forecast predicts circulation will fall to only 3000 cheques processed by December 2018, with usage continuing to decline until cheques completely disappear towards the end of 2019.

Bessie Hassan, money expert at finder.com.au, said cheques had been experiencing a "slow death" in recent years.

"It's possible that the slow death of cheques will be extended slightly longer, with some users holding out and numbers continuing to dwindle," she said.

"However, once cheques become increasingly rare, we would expect businesses to stop accepting them completely.

"Generation Z, which covers all children currently in primary and secondary education, will likely grow up to not recognise a paper cheque at all."

While cheques have become an increasingly rare sight in recent years, they were the main non-cash payment method until the 1980s, when convenient electronic payment systems like credit and debit cards grew in popularity.

According to the Australian Payments Clearing Association, cheque use has dropped by 70 per cent in Australia over the past decade and is "continuing to drop at a rapid annual rate", accounting for less than five per cent of all non-cash payments made by consumers and businesses each day.

A major drawback of cheques is the fact they take three business days to clear on average, while electronic payments are made almost instantly.

According to finder.com.au, traveller's cheques have also all but disappeared in recent years.

Hassan said while similar data was not available for traveller's cheques, the easy availability of credit, debit and travel money cards meant they were no longer the most convenient way of bringing cash overseas.

"Banks were never very fond of traveller's cheques in the past. The built-in guarantee to replace lost or stolen cheques produced a healthy black market in dodgy cheques, with replacing already-cashed cheques a major cost for banks," she said.

"Traveller's cheques are now one of the least convenient ways to travel with currency. The decline in their use means that they're harder than ever to actually cash overseas. Plus, they are available in far fewer currencies than most modern travel money cards."

Hassan said credit, debit and travel cards had "rung the death knell" for traveller's cheques.

"Additionally, some regular transaction accounts from online banks such as ING and Macquarie now allow Australians to purchase goods overseas in any currency with no additional transaction fees," she said.