FNB says that it will discontinue the issuing of cheques as of 1 January 2021.
Customers who still use cheques have been given a six months’ notice period to adapt to alternative forms of payments, the bank said in a statement on Tuesday (7 July).
The bank said that 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.
Kenneth Matlhole, FNB Business Product Head says, as of 1 January 2021, FNB clients will no longer be able to issue cheques. “However, we will still honour other banks cheque payments until further notice,” he said.
Matlhole said that 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, he said.
South Africa has seen an annual decrease of 30% in cheque usage, with cheques contributing less than 0.1% of the total payments ecosystem 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,” he said.
The bank said it has taken the following steps as a phased approach to exit cheques as a payment instrument:
“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.”