Two minutes and fifty seconds into the opening scene of The Big Lebowski, “The Dude”, dressed in his signature robe and briefs, pays for a carton of milk by writing a cheque for $0.69.
And we laugh. For two good reasons.
The first reason we laugh is because he’s writing a cheque for an amount that is probably worth less than the paper on which it’s written, and definitely worth less than the cost that will be incurred to processes it. The second reason we laugh is because he’s writing a f***ing cheque.
Granted these are 2015 millennial scoffs we’re talking about and this movie was made in 1998. But according to a report just released by C.D. Howe, the Canadian Payment Systems tracked just under three trillion dollars in retail transactions made by “Cheque and other paper payments” in 2014. That accounted for 44% of the volume of the country’s retail payments, which includes everything from phone bills and gym memberships to wages and benefits payouts.
That puts us behind only the US (whose ears bleed when you show them a chip on a credit card) and France (too easy) in global ranking for our national dependence on that method of fund transfer.
Unfortunately, it’s not 1998 and nobody wants their country to remind them of an unemployed hippie buying a discount carton of half and half in his boxers. Or a withered grandmother giving their 32-year-old daughter a $100 birthday gift forged from chicken-scratch because they literally couldn’t make it to the bank.
Or even worse, the putz of a G7 who doesn’t know how to drive efficiency with technology; C.D. Howe’s report roughly estimates that Canadian businesses are spending between $1.6 and $4.4 billion dollars more than they need to as a result of their paper fetish.
Not that I need to spell it out too much, but the biggest issue with cheques is the heavy back-end they drag along with them. Anyone who has ever reluctantly limped to a teller or a bank machine (oooooo, aaaahhhhhh, they don’t need envelopes any more) only to be told that what they’re holding isn’t actually money but the future existence of money possibly available in the next 7-10 days, knows exactly what I mean.
The technical term for this model, as outlined in the report, is “payee-pull”; the payee’s financial institution is essentially requesting, or “pulling” the funds from the payer’s financial institution.
The opposite is called “payer-push”; the payer’s financial institution submits, or “pushes” the transaction to the payee’s financial institution. Think direct deposits and email money transfers.
The report suggests significant investment in the infrastructure and tools required to more widely adopt digital payments following the payer-push model, as such a framework would meet all key criteria of a “good payment system”: speed, certainty, linked (integration), and low cost.
A spokesperson from the CPA told CBC that they are actively engaged in consultations on how to modernize systems. But that same spokesperson also implied that part of the modernization efforts could be the implementation of standards that allowed us to “enhance the amount of information you can put on the cheque” to allow for “less need for manual intervention…throughout the payment cycle.”
Um. Right. Baby steps I guess?
The biggest barriers, as usual, are going to be budgets, old people, and idiots.
To say a change like this is “massive” would be an understatement, even just from the technical perspective. Current systems, public and private, would likely need overhauls from the guts on up to truly replace the exchange of cheques across the board with purely digital, integrated solutions. Designing, let alone executing such a transformation within so many organizations is going to require quite a few big signatures on quite a few big…er, um…electronic money transfers.
But a lot of the resistance is going to come from the individual people collectively pumping out these 800 million cheques each year.
For a lot of them, writing a cheque is habit and it’s really, really easy; “Hey, I’ll just scribble some basic letters and numbers in these blank spaces here, and then some time after that date in the top right corner, you go figure out a way to turn this into something worth more than toilet paper with my name on it. Cool?”
No, not cool. Just send me the money now.
Unfortunately not everyone is able or willing to do that. Not everyone is technically savvy or knows their transit number. And amongst the shady, the unorganized, and the irresponsible, it is has never been popular to hand over the money they owe right at this very second.
But that’s fine. Rome wasn’t built in a day, self-adhesive stamps (aka stickers) didn’t make it onto US postage until the 70s and Amazon’s 1-hour booze delivery service just kicked off this week. Big changes take time.
But let’s hope the wheels move extra-quick on this one and that sometime sooner than later our cheques, in the most modern sense of the term, all just bounce.