Home » FinTech » South African Banks  to Phase out Paper Cheques by 2021
FinTech

South African Banks  to Phase out Paper Cheques by 2021

 

The humble paper cheque may be on the verge of extinction in South Africa, as banks begin moves to phase out the age-old method of exchange in favour of cards and digital payment mechanisms.

Major banks Nedbank, FNB and Absa have already announced plans to discontinue the use of outdated cheque payments beginning in January of next year.

The Payments Association of South Africa says that it anticipates that even more banks will be issuing similar public announcements in the next few months. The decline in cheque usage is being exacerbated by the coronavirus outbreak, Pasa acknowledges.

“Following the Covid-19 pandemic, the physical contact required to issue, collect, and process cheques, makes it a less desirable method of payment for consumers and businesses alike,” says the payment management body. “Since the start of the pandemic in South Africa, there has been a massive decline in cheque usage.”

You may read: Nedbank banks big on Property Technology for African Real Estate

Pasa says it intends to support banks who have decided to exit this payment system, “so as to minimise the impact on all stakeholders in the cheque value chain.

“Member banks who have indicated their intent to stop offering cheques as a payment method have made provision for timeous and appropriate communication to reach their customers and all have plans in place to provide more information about the alternative payment options available to them,” states the Association.