Johannesburg, South Africa, Businesses are urged to adopt electronic banking channels following the recently announced rules from the Payments Association of South Africa (PASA) to reduce the maximum value of cheque limits to R50 000 (about $3 450).
The updated rules come into effect in May 2020, with an eight-month grace period to be granted for cheques that are yet to be processed by the due date.
Kenneth Matlhole, FNB Business spokesperson, said several businesses and public institutions that still have cheques built into their operations would be heavily impacted by the decision.
This ranges from schools, churches, scrap metal dealers, agriculture, motor industry, fiduciary services and auctioneers, among others.
He said considering the administration process, storage of physical paper, and the cheques clearance waiting period, migrating to electronic payments which were more efficient would be an incentive to migrate to electronic payments.
According to FNB Business, once a thorough analysis of how the business uses cheques has been conducted, the next step is to identify the most appropriate and efficient electronic banking channel to use.
Matlhole said given the reduction of cheque limits due to several issues including fraud, it might not be viable for businesses to continue using cheques.
Regardless of the final decision to be taken by businesses, one thing is clear, the imminent reduction of cheque limits to R50 000, leaves businesses and institutions with no choice but to ultimately reduce their reliance on cheque payments, he concluded.
Source: African News Agency