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Check book
- Checks as a payment method will be phased out of the South African payment system.
- Check use has decreased at an annual rate of 30%, according to the South African Payments Association.
- Checks have become a less convenient and risky form of payment.
- To see more stories, visit www.businessinsider.co.za.
As of January 2021, checks will no longer be accepted as a form of payment in South Africa, marking the demise of what used to be the most popular non-cash payment method.
In a statement issued Wednesday, the South African Reserve Bank, the Financial Sector Conduct Authority, the South African Payments Association and the South African Banking Association said that the issuance and acceptance or cashing of checks will cease as of 31 December 2020.
This decision was made due to numerous challenges associated with the use of checks, banking authorities said. These include lengthy processing times, check writing fraud, and limited consumer awareness and protection.
Other factors, such as restricted check acceptance, declining use, an aging interbank check processing infrastructure, as well as the impacts of the coronavirus, informed the decisions.
“Therefore, affected stakeholders are requested not to write / write or accept checks after December 31, 2020. They are encouraged to contact their banks to offer alternative electronic payment methods. or direct any queries they may have related to the termination of use process. of checks, “said the joint statement.
Earlier this year, SA banking authorities moved to significantly lower the check limit from R500,000 to R50,000 to protect consumers.
South Africa’s big four banks, whose industry has faced digital disruption, had already announced plans to phase out the antiquated payment method in favor of bank cards and digital payment systems.
SARS followed up earlier this month, saying it will no longer allow checks as a form of payment at customs ports of entry as of December 14, 2020.
According to the South African Payments Association, the use of checks has been declining at a rapid annual rate of approximately 30% as a result of changes in the habits of consumers and of South Africans opting for more secure and convenient digital payments.
Consumers and business entities have now switched to digital alternatives, which have seen significant growth over the years, such as debit and credit card-based payment solutions, EFT, as well as offset payments. in real time.
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