In American English, the usual spelling for both is check. The newer spelling, cheque, is believed to have come into use around 1828, when the switch was made by James William Gilbart in his Practical Treatise on Banking. However, since the 19th century, in the Commonwealth and Ireland, the spelling cheque (from the French word chèque) has become standard for the financial instrument, while check is used only for other meanings, thus distinguishing the two definitions in writing. The spellings check, checque, and cheque were used interchangeably from the 17th century until the 20th century. Paper money evolved from promissory notes, another form of negotiable instrument similar to cheques in that they were originally a written order to pay the given amount to whoever had it in their possession (the ' bearer'). In some countries, such as the US, the payee may endorse the cheque, allowing them to specify a third party to whom it should be paid.Ĭheques are a type of bill of exchange that were developed as a way to make payments without the need to carry large amounts of money. Cheques are order instruments, and are not in general payable simply to the bearer as bearer instruments are, but must be paid to the payee. Both the drawer and payee may be natural persons or legal entities. In an increasing number of countries cheques have either become a marginal payment system or have been completely phased out.Ī cheque is a negotiable instrument instructing a financial institution to pay a specific amount of a specific currency from a specified transactional account held in the drawer's name with that institution. Since then cheque usage has fallen, being partly replaced by electronic payment systems. By the second half of the 20th century, as cheque processing became automated, billions of cheques were issued annually these volumes peaked in or around the early 1990s. The drawer writes the various details including the monetary amount, date, and a payee on the cheque, and signs it, ordering their bank, known as the drawee, to pay that person or company the amount of money stated.Īlthough forms of cheques have been in use since ancient times and at least since the 9th century, it was during the 20th century that cheques became a highly popular non- cash method for making payments and the usage of cheques peaked.

The person writing the cheque, known as the drawer, has a transaction banking account (often called a current, cheque, chequing, checking, or share draft account) where the money is held. A cheque, or check ( American English see spelling differences), is a document that orders a bank (or credit union) to pay a specific amount of money from a person's account to the person in whose name the cheque has been issued.

Checkbook