1. Business Cheque Market Research 2010 August 2010

2. 2 Scope of Presentation ■2010 update of research commissioned by C&CCC ■Survey conducted by Continental Research since 2008 ■Survey covers: –Writing and receiving cheques –Reasons why cheques are used –Alternatives to using cheques –Attitudes to cheques –Knowledge of cheque propositions (2-4-6)

3. 3 Nature of the Research ■Business omnibus survey of 520 businesses ■Survey undertaken in April 2010 ■Northern Ireland included for the first time –2010: Results for whole UK –2008 & 2009: Results for GB only ■Percentages quoted in the following slides can be considered accurate to +/- 5 percentage points ■When comparing results for 2010 with those from previous years, a change of up to 10% from one year to the next may be the result of normal sampling variations, rather than being indicative of a real change in behaviour

4. Usage of Cheques

5. 5 Usage of cheques ■87% of UK businesses said that they had made payments by cheque in the past month –2009: 89% of GB businesses –2008: 89% of GB businesses ■86% of UK businesses said that they had received payments by cheque in the past month –2009: 84% of GB businesses –2008: 84% of GB businesses ■Just 5% of UK businesses said that they had neither made nor received payment by cheque in the past month –2009: 7% of GB businesses –2008: 4% of GB businesses

6. 6 Usage of cheques ■Average of 22 payments made by cheque each month by businesses –2009: 22 cheques per month –2008: 26 cheques per month ■Average of 27 cheques received per month by businesses –2009: 22 cheques per month –2008: 28 cheques per month

7. 7 Number of cheques written and received in the past month (UK, 2010)

8. 8 How use of cheques has changed over the past three years (UK, 2010)

9. Where cheques are used and their alternatives

10. 10 Payments for which businesses use cheques

11. 11 Convenient alternatives to using cheques ■More than half of businesses think that there is a convenient alternative to using cheques for most purposes: Use of cheques Number of businesses in sample identifying each use % of those businesses identifying a convenient alternative Pay a regular business commitment22860% Pay a trade supplier38560% Other ad hoc payments to businesses28751% Pay wages and salaries11039% Other payments to individuals18655% Note that the base size for the percentages in the final column is given by the number of respondents identifying each use for cheques, as shown in the second column

12. 12 Reasons why businesses use cheques

13. Attitudes to cheques

14. 14 Businesses that would have problems if unable to write cheques

15. 15 Preferences when receiving payment

16. 16 Businesses’ willingness to accept cheques 53% of businesses agree that they are reluctant to accept cheques due to fears they may bounce

17. Cheque Propositions

18. 18 Businesses’ knowledge of propositions (compared to T+2, T+4, T+6)

19. 19 Need for information about cheque clearing timings

20. Summary

21. 21 Summary ■No significant changes compared to previous years ■Half of businesses believe they are making fewer payments by cheque compared with 3 years ago ■On average 55% of businesses think there are convenient alternatives to cheques for their specific uses ■However, 78% of businesses believe they would encounter problems if they were no longer able to write cheques