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Why the end of cheque services might be worth worrying about

Why the end of cheque services might be worth worrying about.
Eleanor Bodger, QSO

Recently Kiwibank announced that their cheque service will cease on February 28, 2020. There has been little discussion about this and there’s likely to be a landslide effect. Where one bank goes; others will follow.

The banks will all know the numbers of people such a policy will affect. There are multiple thousands of people around New Zealand who use cheques. Kiwibank alone has said of their customers, 5,400 write cheques monthly. An important question to ask is ‘what is the dollar value of these accounts’? I suspect it will be reasonably low for a number of reasons, including the banks who have already sold older people the loans and mortgages they sought earlier in their lives, and which they would have largely repaid with the accompanying interest. The once good customers risk become dispensable.

Don’t believe everything you hear about older people being great internet adopters. Many are, but there are large numbers who aren’t (think about cost, software and hardware upgrades, the complexity of some programmes, no one to help when things go wrong, disability etc.). Research shows that there is an increase in digital drop off around age 75.

New Zealand has an ageing population and one thing we need to do is make sure that as people get older their contribution remains valued and they continue to be viewed as vital members of our communities. The restorative model of health aims to keep people out of hospitals as much as possible. Evidence continues to grow confirming that how people feel about themselves and their place in society has an impact on their health; for better or worse.

One of the first things that cuts the rug from under one’s feet is the loss of independence. Our society values independence.

The often gradual but cumulative effects of loss of functional independence has a big impact on mental and physical health. And the more we remove tasks from people the more they become disempowered, disengaged and the more others need to do for them or have oversight of them.

Imagine that you look after your own financial affairs, as you probably do. You might only get out on the rare occasion, as you have significant disabilities, however a friend drops by and posts your mail once a week. Your only income is National Super and an accommodation supplement. You manage your own financial affairs via your cheque book, occasional withdrawals from the ATM; and you’re in control.

What happens if you can no longer do that? Are you going to get a family member or friend to look after your financial affairs for you (with or without Enduring Power of Attorney)? If you set up automatic payments what happens for your discretionary spend? Will you withdraw and carry around large amounts of cash? Will you be able to get into the diminishing number of bank branches to complete your transactions? How will you feel?

In our society there are lots of milestones towards adulthood and being in control of your own finances is a common one. We already know of the struggles many have when they lose their driving licence. Imagine how you’d feel if the decision about who manages your financial affairs has nothing to do with your ability and more to do with decisions made by others.

Kiwibank was set up principally as the ‘people’s bank’. There was an assumption of it having a social responsibility towards the individual customer. It can resume that role again, however that will come at financial cost and may not meet the needs of the shareholders (Shareholding of Kiwibank is 51% NZ Post, 25% NZ Super and 22% ACC.)

What do I want from Kiwibank? I want them to remain the ‘people’s bank’ and I want them to reconsider their decision. I could be wrong but don’t think the time is right for many of our current older population. The technology is just not smart enough, intuitive enough or cheap enough yet for them and many others.

Let’s build a society where we bring everyone along, so we all benefit from technology.


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