Source: Supermarket & Retailer
The South African Reserve Bank (SARB), Financial Sector Conduct Authority (FSCA), Payments Association of South Africa (PASA) and the Banking Association South Africa (BASA) have jointly agreed that that the issuing and the acceptance/collection of cheques will cease from 31 December 2020.
The Reserve Bank said this decision was taken due to the numerous challenges associated with the usage of cheques.
It said that these challenges include:
- A lengthy processing period;
- Fraud perpetrated through the issuing of cheques;
- Cheques as an expensive payment instrument;
- The restricted acceptance of cheques;
- Declining usage;
- Limited education and protection for the consumer;
- Ageing interbank cheque processing infrastructure; and
- Impact of the coronavirus pandemic (Covid-19) outbreak.
“In this regard, South African banks will not accept any cheques for deposit or encashment after 31 December 2020,” the Reserve Bank said.
“Banks are expected to extensively communicate with their clients leading up to and beyond the discontinuation of cheques. Furthermore, to educate their clients on alternative electronic payment methods that may be used.”
The SARB said that affected stakeholders are requested not to write/draw or accept cheques after 31 December 2020.
“They are encouraged to approach their banks to be offered alternative electronic payment methods or to direct any queries they may have related to the process of termination of the usage of cheques,” it said.
You can read more about the phasing out of cheques from the national payment system in the SARB’s consultation paper here.