A couple of years ago, I met “Joe,” a third-generation owner who had taken over a successful, multi-generational family business with a loyal customer base.
"The end of cheques is just one part of a broader structural shift in how money moves through the economy."
While the business remained strong, rising inflation was putting pressure on its suppliers, who began tightening payment terms to protect their own cash flow. This flow-on effect forced Joe to increase his overdraft just to keep operations running smoothly.
At the same time, the business was still relying heavily on cheques for customer payments, slowing cash inflows and tying up working capital.
Together with our Transaction Banking specialist, we presented Joe with a simple, practical plan to improve his cash position, without impacting his customers or increasing debt.
Within a week:
PayID and BPAY were implemented
Cheques were removed as a payment option for new customers, and existing customer were being encouraged to stop paying by cheque.
A Commercial Card was introduced to optimise supplier payments
Six months later, the results were clear:
Cash was arriving 10-14 days earlier
He had reduced his Overdraft limit significantly and rarely had a need to use the facility
Weekly branch visits for his office staff were eliminated
- Lower costs enabled a 2.5% early payment discount for customers, further strengthening cash flow
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A system already moving on
Most Australians today are paid with certainty. Funds arrive in their accounts on a predictable day, helping households manage bills and expenses with confidence.
For many businesses, however, payments can still be far less predictable. Delays, sometimes stretching into weeks, can create unnecessary friction and uncertainty, particularly for small and medium-sized enterprises.
The reality is that cheques now play only a very small role in the system. Digital payments have become the norm and today, digital solutions enable same day settlement, with instant payment options available such as PayID, Osko & PayTo enabling funds to move quickly and securely.
The shift isn’t just about convenience. It’s about access to cash and the ability for businesses to operate, invest and grow with greater confidence.
Faster payments, stronger cash flow
The benefits of moving away from cheques become clear when you look at cash flow.
Under a traditional cheque-based model, it can take weeks from issuing an invoice to receiving usable funds, with time lost to processing, postage and clearance.
Digital payments compress that cycle significantly. Funds can arrive the same day, or even instantly.
For businesses, that difference can be material. Faster access to cash improves liquidity, reduces working capital pressure and creates more flexibility in how businesses operate.
It can also unlock new opportunities, from offering early payment incentives to investing in growth sooner.
Why timing matters
Late payments remain a real challenge across the economy, particularly for smaller businesses operating on tight margins.
Delays can affect everything from payroll to supplier relationships, and in some cases, can increase the risk of insolvency.
Improving the speed and certainty of payments is therefore not only about efficiency, but about strengthening the resilience of the broader economy.
As the payments system evolves, faster settlement will play an increasingly important role in supporting businesses to manage these pressures.
Cheques are no longer fit for purpose
As cheque use declines, their limitations have become more pronounced.
They are relatively slow, costly to process, and operationally inefficient. They also carry greater risks, including fraud and payment uncertainty.
At the same time, the infrastructure required to support cheques is becoming harder to sustain as volumes continue to fall.
Australia is not alone in this transition. Other countries, including New Zealand and Denmark, have already phased out cheques, reflecting a global shift toward faster, digital payment systems.
Managing the transition safely
The move away from cheques doesn’t remove risk.
As businesses adopt digital payments, the focus shifts to new challenges such as scams, cyber threats and payment fraud.
This makes it critical that speed is matched with security. Strong safeguards, verification processes and customer awareness all play an important role in maintaining trust in the system.
It’s also why collaboration across banks, businesses, technology platforms and government is essential to ensure the system remains safe, resilient and fit for the future.
Looking ahead
Over the next 24 months, Australia’s payments landscape will continue to evolve rapidly.
The end of cheques is just one part of a broader structural shift, one that includes the growth of real-time payments, increased competition and a stronger focus on efficiency and security.
For businesses, the message is clear: those that embrace digital payments early will be better positioned to benefit from faster cash flow, lower costs and improved customer experiences.
For banks, the role is equally clear: to support customers through this transition, helping them get paid faster, reduce friction and operate with greater confidence.
Because in a more digital economy, how quickly money moves matters more than ever.
For more information about the transition away from cheques in Australia, visit the official Cheques Transition website here.
Cosi De Angelis is ANZ General Manager of Transaction Banking, Business & Private Bank