Advancement in technology could save cheques

New technology has been developed which could be the saviour of cheques with the inclusion of a digital pen, it has emerged.

The planned phasing out of cheques may take a u-turn with the advancement, as sections of society including the elderly still favour the method of payment.

Banks have long bemoaned the continued use of cheques as they are costly to process, but academics from Newcastle, Northumbria and York universities may have hit upon a solution for both sides.

The digital pen means that as the cheque is written the information is immediately transferred to the payee's bank account, but the physical piece of paper is still handed to the recipient.

Dr John Vines, of Newcastle University, said: "The beauty of this system is that it is a safe and cheap electronic transaction for the banks but it’s a physical paper-based transaction for the customer."

The Bank of England first provided its customers with pre-printed forms to transfer money in 1717 and as they were produced on cheque paper to prevent fraud became known as cheques.