In the last 10 years, Australians have been issuing lesser cheques by over 60 per cent. The Australian Payments Clearing Association (APCA) said the irreversible decline of the cheque is due to a change in consumer preference for electronic payments systems such as the use of debit and credit cards.

Only 5 per cent of Australians said they still depend on cheques and would struggle if this monetary instrument would be removed, said APCA Chief Executive Officer Chris Hamilton. However, despite the declining use of cheques, APCA said it would not remove it from circulation while there is a demand for the cheque.

Among the known heavy users of cheques are baby boomers, charities and not-for-profit groups. APCA said a recent research found that 75 per cent of Australians have done away with the cheque and instead resorted to electronic means of payments such as the Eftpos, BPY and credit cards.

Across Australia, cheque usage went down from a peak of 3.9 million in 1995 to just 1.1 million monthly. Besides the drop in the number of cheques issued, the total amount involved also went down to $6 billion from $25 billion.

In contrast, credit card transactions reach 2.3 million on a daily basis, with a value of $17.5 billion.

Processing cost for cheque transactions continue to rise to $7.69 as usage drop, while it costs less than $1.21 to process credit card transactions and less than half a cent for Eftpos or cash payments.

Mr Hamilton said that APCA, at the same time, will coordinate with government to raise public awareness on more modern means of payments.

"We believe competitive forces will see providers and users make their own decisions about cheques, but as volumes continue to drop, cheques are likely to become a niche service," Mozo quoted Mr Hamilton.

While cheque users such as the Country Women's Association insist that cheques are the best way to have a paper trail that could be followed, Mr Hamilton hinted that banks and other stakeholders in the payments industry would manage the eventual phase-out of cheques.

"The end-to-end cost of the cheque is not just the cost to the financial institutions, but the cost from the payer to the payee and everybody in between is much greater for cheques.... It stands to reason that in time we should be using a more efficient alternative," The Age quoted Mr Hamilton.

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