The South African Reserve Bank (SARB) has put out an official statement saying that the issuing and the acceptance / collection of cheques will cease, effective from 31 December 2020.
This joint statement is issued in collaboration with the following South African regulators:
- South African Reserve Bank (SARB)
- The Financial Sector Conduct Authority (FSCA)
- The Pyaments Association of South Africa (PASA)
- The Banking Association of South Africa (BASA)
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The decision to discontinue the use of cheques in South Africa comes from the numerous challenges associated with the usage of cheques.
Watch the ‘Goodbye Cheque Book’ video below by the FSCA:
As announced earlier this week, cheques will no longer be used in the national payment system. #GoodbyeChequebook #FSCAMyMoney pic.twitter.com/dRge5nohic
— FSCA (@FSCA_ZA) November 20, 2020
Some of the challenges highlighted in the statement that led to this 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
- Impact of the coronavirus pandemic (COVID-19) outbreak
According to SARB:
“In this regard, South African banks will not accept any cheques for deposit or encashment after 31 December 2020.
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.”
~ SARB, FSCA, PASA, BASA
This latest update comes just 3 months after ABSA, one of the largest banks in South Africa became the first bank in the country to phase cheques as a means of payments in Africa.
South Africa is one of the leading markets in Africa when it comes to the adoption and use of cryptocurrencies, and this regulation is one more nail to the traditional payments system coffin which continues to lose market share as digital payments take hold across the continent and the globe.
Check out the full statement here.
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