South African banks will not accept any cheques for deposit or encashment after 31 December 2020, the South African Reserve Bank announced on Thursday.
“The South African Reserve Bank (SARB), Financial Sector Conduct Authority (FSCA), Payments Association of South Africa (PASA) and the Banking Association South Africa (BASA) are jointly communicating to the public that the issuing and the acceptance / collection of cheques will cease, effective from 31 December 2020,” the department said in a statement.
The Reserve Bank said the decision was taken due to the numerous challenges associated with the usage of cheques… including the lengthy processing period, fraud, declining usage, it being an expensive payment instrument, and limited education and protection for the consumer.
The challenges also include ageing interbank cheque processing infrastructure and an impact of the Coronavirus (COVID-19) pandemic outbreak, said the Reserve Bank.
SARB said that banks are expected to extensively communicate with their clients leading up to and beyond the discontinuation of cheques, and further educate their clients on alternative electronic payment methods that may be used.
“Affected stakeholders are therefore 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,” SARB said.
Details on the phasing out of cheques are outlined in the consultation paper titled, “The phasing out of cheques in the national payment system”, issued on 2 October 2020, and available here. – SAnews.gov.za