The C.D. Howe Institute presented a paper with recommendations on how to modernize Canada’s payment system. First and foremost (though far from the only step) was to eliminate cheques from Canada’s payment system. The report goes on to list, in broad terms, how this process could take place. One of the steps was to “educate consumers and businesses, especially small businesses,” on making payments electronically rather than by cheque.

Telpay has recognized the advantages of replacing cheque payments by electronic means since it was first formed in 1984 as Canada’s first electronic bill payment system. A more focused approach took place in the late 90’s with the launch of Telpay for Business payment software. Since then Telpay has preached the gospel of electronic payments to thousands of businesses across Canada, both payers and suppliers. In fact, Telpay is a member of an industry forum organized by Finance Canada – Finance Canada Payments Consultative Committee (FinPay).  FinPay is a committee made up of public and private sector representatives whose mandate is to review Canada’s payment industry.

There are a number of reasons why payment by cheque is expensive and inefficient. There are the obvious reasons such as postage and manual labour. However there are more subtle reasons, for example as the volume of cheque payments decreases the costs (system and salary) of processing each cheque increases. New systems that are developed have to “account” for cheque payments, slowing development and making those systems unwieldy.

Cheque payments will die a natural death over the next 10-20 years, what the C.D. Howe institute and others are proposing is a quick “chequemate” sometime in the next few years. We think that is a measure worth supporting.