FNB to stop issuing cheques in South Africa

FNB has announced it will stop issuing cheques from 1 January 2021.

The bank stated the decision follows the declining use of cheques locally and globally, coupled with the recent announcement made by the Payments Association of South Africa (PASA) to reduce the maximum value of cheque limits from R500,000 to R50,000 in May this year.

Customers who still use cheques have been given a six months’ notice period to adapt to alternative forms of payments, the bank said.

FNB Business Product Head Kenneth Matlhole said from 2021 FNB clients will no longer be able to issue cheques.

However, the bank will still honour other bank’s cheque payments until further notice.

Less than 0.1% of total payments

Matlhole said cheque payments have contributed a minute amount of total payments in South Africa in recent years.

“South Africa has seen an annual decrease of 30% in cheque usage, making cheques contributing less than 0.1% of the total payments ecosystem in South Africa,” Mathole explained.

He added that this decline increased substantially during the initial stages of the national COVID-19 lockdown.

“During level 5 lockdown, volumes decreased by 80% and we have seen businesses continue to adapt to more digital and secure options of transacting.”

FNB said it has encouraged clients to migrate to safer, faster and more cost-effective payment mechanisms such as Electronic Funds Transfer (EFT), mobile payments, online banking, and card payments.

“These forms of transacting are not only safer but are far more advanced and effective means that businesses can use to transact,” the bank said.

FNB has taken the following steps as a phased approach to exit cheques as a payment instrument: