As discussed in previous articles, the Australian financial system is moving away from cheques. Several financial institutions will no longer accept or issue them, which is a problem for law firms attempting to navigate transactions in which payment by cheque is still possible.
The table below lists the institutions which will no longer accept cheques and those which have announced pending changes.
Over time, only the “Tier One” banks (Commonwealth, Westpac, NAB and ANZ) have guaranteed that they will remain part of the cheque clearance system until the final shutdown in 2030. Even then, these banks may grandfather cheque access such that certain services will only be offered to existing accounts from a nominated cut-off date.
Why is that a problem for lawyers?
If your trust account is not with an institution that accepts cheques, you will be unable to deposit funds received via cheque to your account, even if it is a bank cheque. If a paying party discharges an obligation by delivery of a cheque to the firm, this can create a significant problem.
If the solicitor is retained prior to the relevant contract being signed, there is some scope to avoid the issue by an appropriately worded special condition. While there is no general legal obligation on a party to accept either a personal or bank cheque in payment, the legacy of many years in which cheques were used means that many agreements (including the REIQ standard conditions) permit them either expressly or implicitly.
The Government indicated that it “expects the financial services industry to play a lead role in ensuring Australians are adequately supported to transition away from cheques and that the closure is appropriately coordinated”. Despite these great expectations banks can and have withdrawn cheque support with limited effective warning. Several smaller banks1 have already exited the system – with little sign of the “adequate support” the government promised.
What to do if someone needs you to bank a cheque and you can’t?
The cheapest and easiest solution is asking the payer to replace the cheque with an electronic transfer. Compensating them for the additional cost would likely be in your interest as the alternatives are expensive. Some of the desire to use a bank cheque is consumer alarm at media reports of funds transfer fraud. Be very cautious about offering to accept the loss if funds are diverted in transit as the safe execution of the transfer is outside your control and your Professional Indemnity insurance may not cover such a contractual obligation.
If another firm agrees to act as escrow agent, deposit the cheque then remit cleared funds to you this is also a possible solution. Usually both transacting parties will need to consent if the payer retains a residual interest in the funds. The agent will no doubt ask to be compensated so an express arrangement as to who does that will be required. Determine whether the cheque is negotiable. If not, it will need to be repurchased and reissued.
Last, and most expensive, is opening another Trust Account on an urgent basis. This is not only time consuming but will leave you with the expense of either closing the old account, with all the inconvenience of obtaining consent to transfer the funds this entails, or maintaining a second account with consequent audit and management costs.
| Approved ADIs Bank Cheque Information (information correct as at 6 March 2025) | |||
| ADI | Accepts Cheques | Pending changes | Resource Link |
| Australia and New Zealand Banking Group Limited (ANZ) | Yes (Phasing out) | Staged approach to the phasing out of cheques. Cheque payments are still accepted (as at March 2025). 3 May 2025: Business accounts will no longer be able to order cheque books on most new accounts, and existing accounts where no cheque books have previously been ordered. | Cheque updates ANZ |
| Bank of Queensland Limited (BOQ) | Yes | No indication of approach to phasing out cheques. | Cheque changes BOQ |
| Bendigo Bank | Yes (Phasing out) | Staged approach to the phasing out of cheques. Cheque payments are still accepted (as at March 2025) New and existing customers cannot order cheque books. Current cheque books remain valid until cheques are not offered as a payment service. | Cheques are on the way out |
| Commonwealth Bank of Australia (CBA) | Yes (Phasing out) | Staged approach to the phasing out of cheques. Cheque payments are still accepted (as at March 2025). Cheque access is available for existing accounts which have had a cheque book issued before 3 June 2023. Existing and new accounts that haven’t had a cheque book issued before that date will not have cheque access. | It’s time to “cheque-out” |
| Macquarie Bank | Phased out | Cheque payment not offered or accepted. 31 October 2024: Cheques received will be returned to sender. 1 November 2024: No longer able to write, print or deposit cheques. | Changes to cash and cheque services |
| National Australia Bank (NAB) | Yes (Phasing out) | Staged approach to the phasing out of cheques. Cheque payments are still accepted (as at March 2025). 3 March 2023: will only provide replacement cheque books to customers already using cheque books. | NAB Corporate Cheque Account |
| QPCU Limited T/as QBANK | Yes | No indication of approach to phasing out cheques. Cheque services are only offered for existing cheque book holders. | Schedule of Fees and Charges |
| Suncorp Bank | Phased out | Cheque payment not offered or accepted. 14 February 2025: Cheque deposits cannot be made to accounts. 1 March 2024: Cannot issue cheques drawn from a personal or business account. | Updates relating to Suncorp Bank Cheque Services |
| St George Bank | Yes | No indication of approach to phasing out cheques | Business Accounts and Payment Services |
| Warwick Credit Union Ltd | Phased out | Cheque payments and processing ended on 27 May 2024. | Exiting Cheques |
| Westpac Banking Corporation | Yes (Phasing out) | Staged approach to the phasing out of cheques. Cheque payments are still accepted (as at March 2025). 19 May 2025: Replacement cheque books won’t be automatically reissued on transaction accounts. Can order a replacement when required. For new accounts from this date, cheque books won’t be available. | Changes to Cheque Services |
(See the Lexon Commercial, Business Sale & Loan pack risk protocols).
Footnotes
1 Macquarie Bank, Warwick Credit Union etc.
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