A quartet of organisations have announced today that as of 31st December 2020, the acceptance and collection of cheques will cease.
Those organisations are the South African Reserve Bank (SARB), the Financial Sector Conduct Authority (FCSA), the Payments Association of South Africa (PASA) and the Banking Association South Africa (BASA).
This has, despite the sudden nature of the announcement, been a long time coming.
In May of this year the SARB reduced the maximum amount payable via cheque from R500 000 to R50 000. Following that reduction, a consultation paper was issued titled “The phasing out of cheques in the national payment system”.
“The consultation paper outlined the challenges relating to the usage of cheques in the NPS, including the challenges faced by the regulators, the payments industry users and consumers (i.e. lengthy processing period, fraud, cheques as an expensive payment instrument, restricted acceptance, declining usage, lack of innovation, limited education and protection for the consumer, ageing cheque processing infrastructure and negative experiences during the coronavirus disease 2019 (COVID-19) outbreak,” reads an SARB notice.
Further to that there has been a massive decline in the number of cheques being used. Between September 2019 and September 2020 the volume of cheques being used dropped 52 percent, while the value of those cheques fell a staggering 82 percent.
Further to this the SARB outlined the following challenges as regards cheques in the national payment system.
- a lengthy processing period
- fraud perpetrated through the issuing of cheques
- cheques as an expensive payment instrument
- the restricted acceptance of cheques
- limited education and protection for the consumer
- ageing interbank cheque processing infrastructure
- impact of the coronavirus pandemic (COVID-19) outbreak
The life and times of cheques then have come to an end in South Africa.
“Affected stakeholders are therefore requested not to write/draw or accept cheques after 31st 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,” the SARB concluded.
Perhaps keep a cheque or cheque book around to show the grandkids how EFTs used to be done.[Image – CC BY BD 2.0 Andrew Gustar]