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The Reserve Bank of South Africa (SARB), the Financial Sector Conduct Authority (FSCA), the South African Payments Association (PASA) and the South African Banking Association (BASA) have jointly agreed that they will cease issuance and acceptance / check cashing. as of December 31, 2020.
The Reserve Bank said this decision was made due to the many challenges associated with using checks.
He said these challenges include:
- A long processing period;
- Fraud perpetrated by writing checks;
- Checks as an expensive payment instrument;
- The restricted acceptance of checks;
- Decreasing use;
- Limited education and consumer protection;
- Age of the interbank check processing infrastructure;
- Impact of the outbreak of the coronavirus pandemic (Covid-19).
“In this regard, South African banks will not accept any checks for deposit or cashing after December 31, 2020,” said the Reserve Bank.
Banks are expected to communicate extensively with their customers before and after the discontinuation of checks. Also, to educate their customers on alternative electronic payment methods that can be used. “
The SARB said that affected stakeholders are requested not to issue / withdraw or accept checks after December 31, 2020.
“They are encouraged to reach out to their banks to offer alternative electronic payment methods or to direct any inquiries they may have regarding the check termination process,” he said.
You can read more about the phase-out of checks from the national payment system in the SARB consultation document. here.
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