Understanding Cheques: How They Work and Why They're Still Used

Cheques are a type of payment method that involves writing a check (a document with pre-printed fields) to pay for goods or services. The person writing the check (the "drawer") instructs their bank to pay the amount stated in the check to the person or business receiving the check (the "payee").

Here's how it works:

1. The drawer writes the check, specifying the amount and the payee.
2. The drawer signs the check, authorizing the payment.
3. The payee receives the check and deposits it into their bank account.
4. The payee's bank verifies the funds and clears the check.
5. The payee's bank then credits the payee's account with the amount of the check.

Cheques are still widely used in some countries, particularly in the United Kingdom and Australia, although their use is declining as electronic payment methods become more popular. Some merchants may still accept cheques as a form of payment, but many have stopped accepting them due to the risk of fraud and the cost of processing them.