Nedbank says that it will start phasing out cheques as its clients move to more secure and cost-effective payment methods.
This is in line with other banks in South Africa, it said, noting that the move is in response to steadily declining demand for, and acceptance of, cheques as a payment mechanism by South African consumers and businesses in recent years.
The gradual discontinuance of cheques applies to both issuance and acceptance by the bank.
Anton de Wet, chief client officer at Nedbank Retail & Business Banking, said most customers have migrated to more secure, convenient and cost-effective digital and card-based payment solutions.
“We have noticed a steady reduction in requests for, and use of, cheque books and bank-issued cheques.
“The outbreak of Covid-19 has exacerbated the decline in cheque usage tremendously and even with the increase in economic activity under relaxed lockdown conditions we have seen previous users staying away from cheques and moving to digital and card payment solutions,” he said.
The first phase of the process begins on 1 September 2020 and will see Nedbank no longer printing or issuing new cheque books or offering bank-issued cheques.
The bank will also no longer be offering special clearance on cheques from that date, nor will it return any physical cheques used by clients to them with their monthly statements. Electronic images of these cheques will, however, still be available on request, it said.
“Our clients are still able to make cheque payments for now, and Nedbank will continue to accept cheques as payment from our clients and customers of other banks,” Anton said.
Nedbank intends to phase out the usage of cheques completely during the course of 2021.
Earlier this month, FNB announced that it will also start phasing out cheques, with issuance ending on 31 December 2020. Special clearance and acceptance of mixed deposits ended from the start of July.
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.
Since May 2020, the maximum value of cheques was limited to R50,000 by the Payments Association of South Africa (PASA).