FNB to scrap cheques, which now represent less than 0.1% of payments in SA
- FNB has announced plans to phase out cheques in the next six months.
- Absa took the same decision last month, as cheque usage continues to slump in South Africa.
- Banks will be notified that FNB cheques presented after 31 December 2020 should not be accepted
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A month after Absa announced its decision to phase out cheques, First National Bank has done the same. It will stop issuing cheques from the start of next year.
South Africa has seen an annual decrease of 30% in cheque usage, the bank says, and cheques now represent less than 0.1% of total payments in South Africa.
“During level 5 lockdown, volumes decreased by 80% and we have seen businesses continue to adapt to more digital and secure options of transacting,” says Kenneth Matlhole, FNB business product head.
Earlier this year, SA’s banking authorities slashed the maximum legal value for which a cheque may be issued in South Africa from R500,000 to R50,000.
While FNB clients will not issue cheques, it will still honour other banks’ cheque payments until further notice.
From the start of next month, cheque clearance period will be a mandatory 10 days without the option of a shorter time period.
FNB will stop printing cheque books from September, and by then, processed cheques won’t be sent to clients any more – but they can view images of cheques via their online banking accounts.
All FNB cheque issuing will stop at the end of 2020.
“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,” says Matlhole.
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