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26OIA2220
19 May 2026
Tom Atkinson
[FYI request #34521 email]
Dear Tom Atkinson
Thank you for your request made under the Official Information Act 1982 (OIA), received on 21
April 2026. You requested information relating to the cessation of cheques as an accepted form
of payment for Inland Revenue. Your request in full is attached as
Appendix A, summarised
below:
1. Why on earth was this done?
2. Who made that decision?
3. How long was this considered for?
4. Did IRD identify any risks associated with doing this?
5. What was the cost to process cheques in 2020/2019?
6. Did removing cheques achieve this goal?
7. Did it improve the rates of late payment penalties or worsen it?
8. Did it require any legislation to change?
9. Did you consult with the public?
10. In retrospect, was that a good choice?
Parts 1, 6, 7, and 10 of your request do not constitute a request for official information under
the OIA, rather they are a request for an opinion. Official information is any information held by
an agency subject to the OIA. This includes:
• Documents, reports, memoranda, emails and drafts
• Non-written information, such as video or tape recordings
• The reasons for any decisions that have been made about you
• Manuals that set out internal rules, principles, policies or guidelines for decision-making
• Agendas and minutes of meetings, including those not open to the public
Information being released
In 2019 the Commissioner of Inland Revenue (the Commissioner) and the Accident
Compensation Corporation (ACC) announced that both agencies would no longer accept cheques
as a matter of course but only by exception in limited circumstances. The use of cheques had
been declining consistently, accounting for 4.67% of payments to Inland Revenue in 2019.
Inland Revenue began considering the viability of cheques as a form of payment around 2018.
During this time, Inland Revenue was going through Business Transformation, a critical upgrade
to systems that had been in place since the 1980s. The intent of business transformation was to
deliver a modern, digital revenue system.
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A critical external factor to consider is that Westpac, Inland Revenue’s principal banking provider,
announced on 23 October 2020 that they would stop accepting cheques after June 2021. In
practice, this would have required Inland Revenue to invest in the equipment necessary to
process cheques manually. The cost of this equipment and the staff required to process cheques
would have been prohibitively impractical at a cost per transaction level. Other major banks
were on similar timelines for the disestablishment of cheques as a method of payment. To ensure
business continuity and resilience, Inland Revenue aligned with the banking environment.
Migrating away from cheques was seen to reduce risks, as cheques involved manual handling,
physical transport, and data entry which was susceptible to user error and time delays. Electronic
payments and direct bank transfers virtually eliminate those issues. Any fraud and security
concerns specific to cheques, such as forged or stolen cheques, would be mitigated by using
digital channels with bank authentication. Further to this, dishonoured payments would no longer
a factor, improving the certainty of collection.
Inland Revenue was acutely aware that some segments of the population had a longstanding
reliance of cheques, and the disestablishment of this payment method was structured to make
it as easy as possible for those affected. This decision was announced 8 months ahead of time
and was followed by targeted communication and education for those who regularly pay via
cheque. Alternatives were offered in the form of telephone-based payments by card, online
banking reference codes, pre-populated payment barcodes and the option to pay by cash or
EFTPOS at a Westpac branch.
Inland Revenue did not retain a quantified cost for processing cheque payments in 2019/20.
The decision to stop accepting cheques was based on declining usage and cost avoidance,
including avoiding the need to reinvest in obsolete cheque-processing infrastructure, rather than
on a specific per-cheque processing cost. Your request for the cost to process cheques in 2019/20
is refused under section 18(g) of the OIA, the information requested is not held by Inland
Revenue, nor do I have reason to believe this is held by another department.
This change did not require any legislative amendments. Although cheques have been commonly
used over the years, they are not actually legal tender. Section 27 of the Reserve Bank of New
Zealand Act 1989 defines legal tender as bank notes and coins and does not include cheques.
The Tax Administration Act 1994 does not prescribe specific payment methods that Inland
Revenue must accept. Instead, it requires taxpayers to meet their tax obligations, while leaving
the administration of payment processes to the Commissioner. Cheques are not legal tender
under New Zealand law, and there is no statutory requirement for Inland Revenue to accept
them. Despite this, Inland Revenue did maintain limited exceptions to the acceptance of cheques
in such cases where the taxpayer had no other means available to them.
In October 2019, Inland Revenue’s Technical Standards team released a draft standard practice
statement for internal and external consultation. Standard practice statements describe how the
Commissioner will exercise a statutory discretion or deal with practical issues arising out of the
administration of the Inland Revenue Acts. This external consultation on the draft Standard
Practice Statement related to tax payments, including how payment methods are treated
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administratively. This was not a standalone consultation explicitly regarding the acceptance of
cheques as a form of payment.
Right of review
If you disagree with my decision on your OIA request, you have the right to ask the Ombudsman
to investigate and review my decision under section 28(3) of the OIA. You can contact the office
of the Ombudsman by email a
t: [email address].
Publishing of OIA response
We intend to publish our response to your request on Inland Revenue’s website
(ird.govt.nz) as
this information may be of interest to other members of the public. This letter, with your personal
details removed, may be published in its entirety. Publishing responses increases the availability
of information to the public and is consistent with the OIA's purpose of enabling more effective
participation in the making and administration of laws and policies and promoting the
accountability of officials.
Thank you again for your request.
Yours sincerely
Sarah Bourke
Customer Segment Leader – Micro Business & Communities
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Appendix A
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
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- 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://aus01.safelinks.protection.outlook.com/?url=https%3A%2F%2Fwww.cab.org.nz%2Fart
icle%2FKB00041524&data=05%7C02%7Coia%40ird.govt.nz%7C0b1066cb020148ae3fc208de
9ed67cc9%7Cfb39e3e923a9404e93a2b42a87d94f35%7C1%7C0%7C639122841422021592%
7CUnknown%7CTWFpbGZsb3d8eyJFbXB0eU1hcGkiOnRydWUsIlYiOiIwLjAuMDAwMCIsIlAiOiJXa
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W4zMiIsIkFOIjoiTWFpbCIsIldUIjoyfQ%3D%3D%7C60000%7C%7C%7C&sdata=drsbM4t0Xoj1E
1MR7oNqrC9JGmLY%2BAWLF%2B89RRBeoiU%3D&reserved=0
[2]
https://aus01.safelinks.protection.outlook.com/?url=https%3A%2F%2Fwww.rbnz.govt.nz%2F
education%2Fexplainers%2Fwhat-is-legal-
tender&data=05%7C02%7Coia%40ird.govt.nz%7C0b1066cb020148ae3fc208de9ed67cc9%7C
fb39e3e923a9404e93a2b42a87d94f35%7C1%7C0%7C639122841422054611%7CUnknown%
7CTWFpbGZsb3d8eyJFbXB0eU1hcGkiOnRydWUsIlYiOiIwLjAuMDAwMCIsIlAiOiJXaW4zMiIsIkFOIj
oiTWFpbCIsIldUIjoyfQ%3D%3D%7C60000%7C%7C%7C&sdata=9yt%2FNVAVE2%2FRX5PDO
h8kj3%2FaWFX0%2FVfLZqVyQ4%2Fl%2BmM%3D&reserved=0
[3]
https://aus01.safelinks.protection.outlook.com/?url=https%3A%2F%2Fwww.interest.co.nz%2
Fsites%2Fdefault%2Ffiles%2FPayments%2520NZ%2520cheques%2520report.pdf&data=05%
7C02%7Coia%40ird.govt.nz%7C0b1066cb020148ae3fc208de9ed67cc9%7Cfb39e3e923a9404
e93a2b42a87d94f35%7C1%7C0%7C639122841422077707%7CUnknown%7CTWFpbGZsb3d8
eyJFbXB0eU1hcGkiOnRydWUsIlYiOiIwLjAuMDAwMCIsIlAiOiJXaW4zMiIsIkFOIjoiTWFpbCIsIldUIjo
yfQ%3D%3D%7C60000%7C%7C%7C&sdata=2RCWJ%2BoDWQ4fvJgBYw3cO9jCoV0NF1BBcq
3eG3RiRvM%3D&reserved=0
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