Decision and planning around disabling cheques as a form of payment
Tom Atkinson made this Official Information request to Inland Revenue Department
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From: Tom Atkinson
Dear Inland Revenue Department,
in the second half of the 20th century, billions of cheques were issued annually worldwide, and yet in 2020 you surprisingly stopped accepting cheques as a form of payment leading to a catastrophic loss of cheques as a payment method by 2024, with zero New Zealand banks being able to accept any cheques including foreign cheques! This was done when cheques were used for 11% of payments, with 2.4 million cheques being written in 2016.
Banks have special rights and responsibilities granted to them by banking legislation. In return for their duty, banks get the right to generate mortgages and take deposits, and part of that duty was processing cheques.
Why on earth was this done?
Who made that decision?
How long was this considered for?
Did IRD identify any risks associated with doing this?
What was the cost to process cheques in 2020/2019?
Did removing cheques achieve this goal?
Did it improve the rates of late payment penalties or worsen it?
Did it require any legislation to change?
Did you consult with the public?
In retrospect, was that a good choice?
This destruction of a useful payment had negative effects in decreasing order of severity:
- removes ability to provide payment to a child, disabled person, someone unable to leave the house
- leaves cash as only option to make or receive payment in the event of a power cut, internet outage or if telecommunications is "out of service"
- removes the postal service as a method to make payment eg "the cheque is in the mail"
- destroys an instant, low-tech, and anonymous use of money
- no longer possible to use "two to sign" as a security measure for non-profit groups to track and restrict spending by members
- electronic payments do not always identifiy who the payer is unlike cheques
- Transaction limits can force some organisations to issue cheques for large payments.
- reduced security in cases where cash is now used where cheque was once used- removes chance to use a race condition to revoke a payment by ripping up or otherwise destroying a payment currently "in flight" by anyone with physical access to an unbanked cheque payment say for example the contents of a safe with shared combination code
According to the latest research I could find [3] accounts in rural regions use approximately 15 per cent more cheques per year than accounts in urban areas. Urban cheques have an average value of $2,408. Rural cheques have an average value of $1,876. On average people deposit 5 cheques per year. The top 100 issuers are primarily organisations in industries that make a large number of irregular payments. Sectors for these organisations include government, insurance, retail, and utilities. This group issues 7 per cent of all cheques. EFTPOS is the most dominant payment type used by cheque users. It accounts for 56 per cent of all payments made. Credit cards are second at 12 per cent, while cheques account for 11 per cent of payments. The average value of any cheque is $2,363.
I noticed the Citizens Advice Beaurau says a business can only not accept cash as a form of payment if they either tell you in advance, or display a sign at the entrance of the premises; however they can not decline cash as a payment if paying off debt. [1] this is backed up by the Reserve Bank at [2] "Yes. If you want to use cash to pay off debt, businesses are obliged to accept it."
According to Payments NZ: "Mr Nichols said that paper (primarily cheque) usage in New Zealand had been declining at an annual average rate of nine per cent over the last eight years. Cheques interchanged through the financial system have reduced from around nine percent of total retail transactions across all payments methods in 2003 to two percent in 2010."
I believe a call for cheques to be re-instated as a payment method will come about 2 to 6 months after an X10 solar flare takes either down a large part of the power grid or does significant damage to a banks computer system.
Yours faithfully,
Tom Atkinson
[1] https://www.cab.org.nz/article/KB00041524
[2] https://www.rbnz.govt.nz/education/expla...
[3] https://www.interest.co.nz/sites/default...
From: oia
Inland Revenue Department
[EXTERNAL IN-CONFIDENCE]
[EXTERNAL IN-CONFIDENCE]
Dear Tom,
Thank you for your request under the Official Information Act 1982, received on 21 April 2026.
We will reply within the statutory 20 working days, by 20 May 2026.
Your reference number is 26OIA2220.
Kind Regards,
Ministerial Services | Inland Revenue - Te Tari Taake
-----Original Message-----
From: Tom Atkinson <[FOI #34521 email]>
Sent: Tuesday, 21 April 2026 12:15 am
To: oia <[IRD request email]>
Subject: Official Information request - Decision and planning around disabling cheques as a form of payment
External Email CAUTION: Please take CARE when opening any links or attachments.
Dear Inland Revenue Department,
in the second half of the 20th century, billions of cheques were issued annually worldwide, and yet in 2020 you surprisingly stopped accepting cheques as a form of payment leading to a catastrophic loss of cheques as a payment method by 2024, with zero New Zealand banks being able to accept any cheques including foreign cheques! This was done when cheques were used for 11% of payments, with 2.4 million cheques being written in 2016.
Banks have special rights and responsibilities granted to them by banking legislation. In return for their duty, banks get the right to generate mortgages and take deposits, and part of that duty was processing cheques.
Why on earth was this done?
Who made that decision?
How long was this considered for?
Did IRD identify any risks associated with doing this?
What was the cost to process cheques in 2020/2019?
Did removing cheques achieve this goal?
Did it improve the rates of late payment penalties or worsen it?
Did it require any legislation to change?
Did you consult with the public?
In retrospect, was that a good choice?
This destruction of a useful payment had negative effects in decreasing order of severity:
- removes ability to provide payment to a child, disabled person, someone unable to leave the house
- leaves cash as only option to make or receive payment in the event of a power cut, internet outage or if telecommunications is "out of service"
- removes the postal service as a method to make payment eg "the cheque is in the mail"
- destroys an instant, low-tech, and anonymous use of money
- no longer possible to use "two to sign" as a security measure for non-profit groups to track and restrict spending by members
- electronic payments do not always identifiy who the payer is unlike cheques
- Transaction limits can force some organisations to issue cheques for large payments.
- reduced security in cases where cash is now used where cheque was once used- removes chance to use a race condition to revoke a payment by ripping up or otherwise destroying a payment currently "in flight" by anyone with physical access to an unbanked cheque payment say for example the contents of a safe with shared combination code
According to the latest research I could find [3] accounts in rural regions use approximately 15 per cent more cheques per year than accounts in urban areas. Urban cheques have an average value of $2,408. Rural cheques have an average value of $1,876. On average people deposit 5 cheques per year. The top 100 issuers are primarily organisations in industries that make a large number of irregular payments. Sectors for these organisations include government, insurance, retail, and utilities. This group issues 7 per cent of all cheques. EFTPOS is the most dominant payment type used by cheque users. It accounts for 56 per cent of all payments made. Credit cards are second at 12 per cent, while cheques account for 11 per cent of payments. The average value of any cheque is $2,363.
I noticed the Citizens Advice Beaurau says a business can only not accept cash as a form of payment if they either tell you in advance, or display a sign at the entrance of the premises; however they can not decline cash as a payment if paying off debt. [1] this is backed up by the Reserve Bank at [2] "Yes. If you want to use cash to pay off debt, businesses are obliged to accept it."
According to Payments NZ: "Mr Nichols said that paper (primarily cheque) usage in New Zealand had been declining at an annual average rate of nine per cent over the last eight years. Cheques interchanged through the financial system have reduced from around nine percent of total retail transactions across all payments methods in 2003 to two percent in 2010."
I believe a call for cheques to be re-instated as a payment method will come about 2 to 6 months after an X10 solar flare takes either down a large part of the power grid or does significant damage to a banks computer system.
Yours faithfully,
Tom Atkinson
[1] https://www.cab.org.nz/article/KB00041524
[2] https://www.rbnz.govt.nz/education/expla...
[3] https://www.interest.co.nz/sites/default...
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From: oia
Inland Revenue Department
[EXTERNAL IN-CONFIDENCE]
[EXTERNAL IN-CONFIDENCE]
Kia ora Tom Atkinson,
Please find attached Inland Revenue’s response to your request under the
Official Information Act 1982, received on 21 April 2026.
Kind regards,
Oliver
Ministerial Services | Inland Revenue - Te Tari Taake
This email and any attachment may contain confidential information. If you
have received this email or any attachment in error, please delete the
email / attachment, and notify the sender. Please do not copy, disclose or
use the email, any attachment, or any information contained in them.
Consider the environment before deciding to print: avoid printing if you
can, or consider printing double-sided. Visit us online at ird.govt.nz
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