SA: Banks to scrap cheques

  1. Posted on Wednesday 13 January 2010 - 08:49
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    Peter Griffiths, AfricaNews reporter in Johannesburg, South Africa
    South Africa will follow the UK's banking system in investigating whether cheques should be phased out. The UK's Payment Council, citing a dramatic drop in usage, has announced that cheques would stop circulating in 2018, but that this decision would be reviewed in 2016.
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    South Africa, like the UK, has experienced a dramatic drop in cheque usage as banking clients increasingly make use of electronic services.

    Nedbank, one of South Africa’s largest banks, has seen cheque volumes decline annually by 24 percent, according to the bank’s head of retail payment, Carmen Whateley.

    The Payments Association of South Africa (Pasa) is currently investigating whether Africa’s largest economy should follow. Pasa, which hasn’t confirmed methodology or timelines, has said they would look at volumes to determine whether cheques would naturally go into disuse and the risks involved in phasing out cheques.

    “We are still analysing which way we will be going. We are having a look at the trends and factors that influence the continued use of cheques similar to what the UK has done,” said Pasa executive for strategy and communication Arif Ismail.

    Stuart Grobler, the senior general manager for Banking Association, said that while South Africa’s banking system was more electronically advanced than in the UK and US, removing cheques from circulation may still hurt business users and the elderly.

    “It would require a lot of research into loyal customers, the vulnerable and the aged. It's almost like you would have to wait for the vulnerable to stop using cheques and wait for the next more electronic savvy generation," said Grobler.

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