If you have a cheque worth more than R50,000 lying around, you need to cash it in soon
- The Payments Association of South Africa (PASA) is reducing the maximum limit on cheques from R500,000 to R50,000.
- That also affects recipients cashing in cheques.
- According the Association less than 10% of cheques signed are for more than R50,000 – but those higher-value cheques carry more risk of fraud.
- For more stories go to www.BusinessInsider.co.za.
You will no longer be able to write valid cheques for R500,000 in South Africa come May 2020 – and if you have a cheque worth more than R50,000 sitting around, now would be a good time to cash it in.
From May new rules from the Payment Association of SA (PASA) will will reduce the maximum value for cheques from R500,000 to R50,000.
And that will also affect those cashing in cheques, PASA spokesperson Patricia Naicker told Business Insider South Africa.
Those with cheques exceeding R50,000 in their possession have another eight months to cash them before the new rule comes into effect – though you may want to move faster than that anyway; a cheque is considered "stale" and may not be paid six months after its date of issue.
The association reduced the cheque limit from R5 million to R500,000 in 2012.
Walter Volker, Pasa CEO, said in a statement that the latest decision stems from the need for better risk management and the ongoing decline in the use of cheques as a payment method.
“Although less than 10% of signed cheques are for values above R50,000, the inherent risk of transactions above R50,000 is higher, based on potential fraud,” Volker said.
The use of cheques has been declining at a rapid rate – down approximately 30%, year on year – driven by the shift in consumer habits, Volker said.
After extensive consultations, the South African Reserve Bank (SARB) has endorsed the limit reduction.
Compiled by Bombi Mavundza
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