South African association predicts the death of the cheque
The Payments Association of South Africa (PASA) has rung the final bell on the usage of cheques in the country after major banks announced intentions to discontinue the payment channel.
The association, whose members include the largest banks in South Africa, says it anticipates more banks to phase out cheques soon.
“The usage of cheques has rapidly declined over the last decade, with very few consumers, public and business entities presently making use of this payment method,” it writes.
“This payment method is also significantly less effective than any of the digital payment methods available today.”
PASA says that it will continue to work with member banks who are cutting their cheque usage. It aims to ensure they exit the market in a “safe manner” to minimise impacts on customers.
Decline and fall
FNB, Nedbank and Absa Bank all outlined their plans to scrap cheques earlier this year.
FNB said that cheques had seen a 30% decline in 2019. It also found less than 0.1% of all payments in South Africa use a cheque.
The bank’s business product head Kenneth Matlhole tells Business Insider that a COVID-19 lockdown had seen cheque volumes decrease by 80%. He added that many people are turning to digital alternatives.
All cheque issuance from FNB will halt at the end of 2020.
Absa and Nedbank moved faster than their compatriot and halted the printing of cheque books at the start of July and September, respectively.
2020 also saw South African banking authorities cut the maximum legal value for cheque issuance from $30,000 to $3,000.
PASA says consumers are “encouraged” to liaise with their banks regarding the impact of the discontinuation of cheques. It adds that it will continue to monitor the process.