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Cheques

A cheque is an instruction in writing from an account holder to their bank to pay a specified sum of money to a designated beneficiary. Cheque usage in Ireland in recent years has begun to decline and as Irish society embraces more modern electronic payment alternatives, it is likely that cheque usage will continue to decline further.

Characteristics of Cheques for Issuers

  • The physical characteristics of cheques are subject to technical specifications which must be adhered to. A specimen of a customer printed cheque must be tested for automation and approved for use by your bank.
  • View the recommended Guidelines for Printing and Using Company Cheques in Republic of Ireland here.
  • Cheques that do not conform to technical specifications may result in them being ineligible for automated clearing and they may be refused at the point of lodgement
  • Cheques are generally subject to higher levels of fraud than electronic payments and precautions should be taken to prevent alteration
  • For added security and good internal auditing practice, cheques can be countersigned by one or more authorised signatories
  • Lost or stolen cheques can be ‘stopped’ provided they have not already been paid – contact your bank directly to arrange this
  • Cheques are liable to Government stamp duty of 50c per cheque
  • Cheques lodged to an account in the same bank on which they are drawn do not go through the inter-bank clearing process. As a result, the accounts on which they are drawn may be debited on the same day the cheques are lodged. On the other hand, cheques are valid for up to six months from their issue date, so it may be some time before a cheque is debited.

Characteristics of Cheques for Receivers

  • Cheques lodged to an account are subject to a clearing cycle so, unlike electronic credit transfers, funds are generally not immediately available
  • Cheques can be returned unpaid for many reasons
  • Cheques can be delayed in transit due to postal delays or other disruptions and can result in late receipt of payment
  • Cheques can be intercepted before reaching their destination and become subject to fraud
  • Cheques must be brought/sent to your bank for lodgement to your account and will then be subject to clearing timeframes
  • Cheques are unsuitable for making or receiving international payments. There is no agreed cross-border clearing cycle for cheques; therefore there is uncertainty around when funds will be available.