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In a boon to the electronic payments market, the banks have announced they will stop issuing and receiving cheques by 31 October 2018.

The Payments Council board, made up of clearing banks, has agreed to end central cheque clearing after completing a consultation. The banks want to save on clearing costs by moving everyone to cheaper electronic transactions.

Over the next nine years the Payments Council said it will seek to promote and explain existing alternatives, and where innovation and new options are required, it says it will ensure they are put in place.

Although cheque use has been in terminal decline since around 1990, and has fallen by 40% over the last five years, there are still plenty of situations where cheques are used extensively.

These include payments between individuals, and payments to sole traders, small businesses, clubs, charities and schools. "The payments industry has to rise to the challenge of finding easy-to-use efficient alternatives for these payments, and to ensure that they are easily accessible and well understood by cheque users," said the Payments Council.

"The goal is to ensure that by 2018 there is no scenario where customers, individuals or businesses, still need to use a cheque," it said.

The Payments Council said it will undertake a full review in 2016 before any final decision on axing cheques completely is taken.

Learn how your organisation can make significant cost savings through switching to electronic payments early