SARS signals the end of cheques in South Africa
The South African Revenue Service (SARS) says it will discontinue the use of cheques from next year, as the country’s banks increasingly move away from the payment option.
“Following the decision by South African banks to discontinue cheques as a form of payment, SARS has decided not to accept cheques as a form of payment at customs ports of entry from 14 December 2020 and at banks from 1 January 2021,” the revenue collector said.
SARS said that taxpayers and customs clients who need to pay SARS can use one of the following options:
- eFiling;
- Electronic Funds Transfer (EFT);
- At a bank branch (cash and EFT). All payments can be made at any ABSA, Capitec, FNB, Nedbank or Standard Bank branch.
- Travellers entering and leaving the country will still be able to pay cash at the port of entry.
“Taxpayers are reminded that all payments must contain the correct beneficiary ID and payment reference number (PRN). Detailed payment information is available on the SARS website,” it said.
Almost all of the country’s major banks have announced that they plan to or have already moved away from cheques as a payment option.
The move has been hastened by various limit reductions, the continued reduction of cheque usage during the Covid-19 lockdown period as well as the adoption of digital and cheaper alternatives by clients.
Cheque books are seldom seen in society today, with the convenience of contactless cards taking over the payments space. Historically, clients would have been able to pay up to R5 million using a cheque, the bank said.
However, this limit has reduced over time driven by overall usage. The last limit reduction came into effect on 1 May 2020, which now only allows for payments of up to R50,000.
Standard Bank said that it will stop the use of all cheques on 31 December.
“We will align with a co-ordinated industry phase-out plan in order to help clients transition, especially given the business process changes that will need to take place across all stakeholders. Our clients will have between August to the end of December 2020 to adopt new payment methods,” said Busi Radebe, head of payment at Standard Bank.
FNB is also in the process of phasing out cheques, with issuance ending on 31 December 2020.
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.
Nedbank intends to phase out the usage of cheques completely during the course of 2021.
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.
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