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:
|1 July 2020||Discontinuation of special clearance.
Discontinuation of mixed deposits containing cash and cheques.
|1 August 2020||The cheque clearance period will be a mandatory 10 days without the option of a shorter time period.|
|1 September 2020||Processed cheques will not be returned to clients with their statements. Images of cheques are available via Online Banking.
No new or replacement cheque books will be printed. This includes privately printed cheques.
|31 December 2020||FNB cheque issuing will be discontinued. This means that any FNB cheques that are captured after the final date will not be deposited or encashed. All South African banks will be notified that FNB cheques presented after 31 December 2020 should not be accepted.|