Eurochecks were a popular form of payment from the 1970s to the 1990s, but have since declined due to their high processing costs and fraud. They were often accompanied by a check guarantee card, which is no longer valid. The Maestro card is now considered the successor to Eurochecks.
A Eurocheck, also called a “Eurocheque,” is an alternative to a traveler’s check, a piece of paper that can be exchanged for the amount you specify. It is similar in appearance and function to North American traveler’s checks and accepted by banks that display the coat of arms of the European Union. This type of check can be written in different currencies and is accepted across European borders. Money represented by Eurochecks is considered safe, as it can be recovered even if the check itself is lost or stolen. While the Eurocheck was very popular from the early 1970s to the late 1990s, it is no longer widely issued or accepted as of 2002.
There are several reasons why Eurocheck fell out of use. First, processing these checks was expensive for banks compared to other forms of payment, such as debit cards. Additionally, fraud was a serious problem costing both retailers and banks. When first introduced, Eurocheck was widely used, offsetting both the cost of fraud and processing. Eventually, however, the use of this type of check declined sharply as people began to pay with credit cards or cash withdrawn from ATMs.
A check guarantee card often accompanied a Eurocheck. This card was basically a short letter of credit, a document from a financial institution indicating that they are willing to lend money to that person if their purchase exceeds the amount available in the account. Euro checks were generally not accepted if a person did not have a check guarantee card. In 2002, this guarantee card was no longer considered valid, and Eurocheque International, a cooperative society, merged with Mastercard. The merged companies launched the Maestro card, an internationally accepted debit card often considered the successor to Eurochecks and the check guarantee card.
Originally introduced for international use by travelers, Eurochecks were quickly adopted for domestic use as well. In fact, less than five percent of Eurochecks were used for international payments. By the end of Eurocheck’s popularity, almost 50 countries accepted this form of payment, and around two dozen countries issued Eurocheck. Contrary to popular belief, Eurochecks are not related to the Eurodollar. Both the name similarity and the fact that Eurochecks were discontinued on the same day that Eurocurrency was introduced is purely coincidental.
The Eurocheck has largely fallen out of use, but can still be found in circulation. Companies like Mastercard warn against accepting Eurochecks from strangers, as they are no longer supported by financial institutions if the customer does not have enough money available in their account. Due to the risk of non-payment, Eurochecks should only be accepted as payment when the customer is known, and even then in special circumstances.
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