FNB discontinues cheque issuance
Other countries and some financial service providers in South Africa have already moved away from cheques as they are an inefficient.
FNB recently announced that it will be discontinuing the issuing of cheques by January 1, 2021.
Customers who still use cheques have been given a six months’ notice period to adapt to alternative forms of payments.
This 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.
According to Kenneth Matlhole, FNB Business Product Head, as of January 1, 2021, FNB clients will no longer be able to issue cheques.
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However, they will still honour other banks cheque payments until further notice.
Over the years, FNB 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.
“South Africa has seen an annual decrease of 30 per cent in cheque usage, making cheques contributing less than 0.1 per cent of the total payments ecosystem in South Africa,” said Matlhole
“During level five lockdown, volumes decreased by 80 per cent and we have seen businesses continue to adapt to more digital and secure options of transacting.”
Other countries and some financial service providers in South Africa have already moved away from cheques as they are an inefficient, costly form of payment and have become more susceptible to higher levels of risk.
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“The decision to exit cheques has been done with great consideration to ensure that we offer payment alternatives for our customers who have been using cheques,” said Matlhole.
“We will continue to work with our customers to ensure a smooth transition to payment alternatives that are more secure, efficient and cost effective than cheques.”
Contact your banker or the FNB Business Desk on 0877 362 247 for more information.
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