Britain to outlaw paper checks by 2018


Recently one of my kids asked me to explain what a cassette tape was. As much of a shock that was, it was a bigger shock to think that their kids will probably be asking them, “What’s a check?”

As I was doing my yearend finances, I discovered I wrote a grand total of 8 paper checks last year. That was not even one a month! Paper checks are going the way of the dodo. In fact, online banks like ING Direct already have a checking account with no paper at all, where all transactions are electronic.

Paper checks open you up to one of the worst forms of identity theft when people write them as if they’re you, after they’ve either stolen or somehow duplicated your checks. You could end up in jail.

I haven’t carried a checkbook on my person in almost 20 years. Now the British look set to be the first developed country in the world to outlaw paper checks. This move will be phased in slowly over the next 7 years in England.

The death of checks in our country started in the aftermath of 9/11, when the banks couldn’t move checks around the country. That prompted the eventual introduction of Check 21, a law that allows banks to process checks electronically. Today, more and more places allow check deposits to be made via e-mail from a computer or even an iPhone.

So the paper check era is coming to a close stateside too, albeit more slowly. But the end of paper checks opens up new challenges. In a world of ATMs, auto-drafts, debit cards and more, banking has gone from being linear to us losing control. You have to get it back under control.

How can you keep track of money when there’s no paper trail? I still like to see and track money via paper statements, even though I don’t write paper checks. The goal is to never lose sight of how much comes in and how much goes out. To that end, you might consider some of the free online budget tracking tools I’ve listed below.

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