The digitisation of banking in South Africa is set to reach a major milestone by the end of the year, as cheque payments will officially be rendered ‘obsolete’. The end of this era will take effect on 31 December 2020, leaving some citizens – including Tito Mboweni – with roughly six weeks to use-up the remainder of their cheque books.
Cheque mate: End of the road for traditional payment method
SARB issued a statement on the matter earlier this week. Those who are looking to cash, write-out, or pay their cheques in the near future will instead be guided on how to use the electronic alternatives:
“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,”
“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.”
Why are cheques being discontinued in South Africa?
SARB said the decision was taken due to ‘the numerous challenges associated with the usage of cheques, including:
- A lengthy processing period.
- Fraud perpetrated through the use of books.
- The fact they are a relatively expensive payment instrument.
- A restricted acceptance of cheques.
- Declining usage.
- Limited education and protection for the consumer.
- Health concerns raised by COVID-19 (having to physically touch the payment method).
Tito Mboweni amongst those affected
ARB 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. We just hope that Tito Mboweni has signed-up to receive this information…
I am probably one of the few remaining people who still insist on writing a cheque. You can’t get rid of us! Sorry!
— Tito Mboweni (@tito_mboweni) June 6, 2020
Apparently I am one of a few who still write cheques!! Safe!! pic.twitter.com/hPmlYh34LA
— Tito Mboweni (@tito_mboweni) January 8, 2019
On a lighter note. ABSA sent me a new cheque book!🙈🙈 pic.twitter.com/juf0DoHWp0
— Tito Mboweni (@tito_mboweni) September 5, 2020