The days of whipping out the book and writing out a cheque are drawing to a close, as the Federal Government announces Australians will no longer be able to pay by cheque after 2030.

In addition, the use of BSBs and account numbers will also be phased out, in favour of newer ID forms, while the RBA will be given stronger regulatory powers over digital payment systems controlled by overseas tech companies like Apple.

Treasure Jim Chalmers announced the changes at the Australian Banking Association industry conference today, calling the current banking system “clunky, inefficient and cumbersome to maintain”.

“Leaving cheques in the system is an increasingly costly way of servicing a declining fraction of payments,” Chalmers said. “This transition will be gradual, co-ordinated and inclusive.”

Cheques currently make up between 0.2 and 0.3 per cent of all transactions.

“We haven’t had a coherent, sensible strategy to phase out costly means of exchange,” Chalmers continued.

“Our agenda is to address and resolve these issues to remove the barriers that are inhibiting the development of a modern payments system.”

Part of this modern payments system will be tighter regulation over newer sectors of the finance industry, such as Apple Pay wallets, tap-and-go systems that rely upon proprietary technical, and BNPL lenders.

“Our regulatory frameworks and infrastructure have not kept up with the big trends and transitions happening in finance, especially when it comes to the digital economy and payments.”

Consultation on the overhaul, called the New Payments Platform, starts this month, and is expected to be introduced in parliament by the end of the year.

“All this means that a more modern payments system also means more innovation, more productivity and more growth. And with the plan I’m releasing today, our policy settings will now reflect that opportunity,” Chalmers told the bankers.

“The breadth of what we’re doing with your sector reflects an understanding that our efforts to grow the economy rely heavily on our ability to realise our vision for a modern, world-class and efficient payments system.”