South Africa’s banking giant Absa Bank has decided to stop issuing cheque books to its clients from July 2020, the PTI has reported.
The decision is in response to the significant drop in the usage of cheques as a payment method in South Africa.
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The cheque usage in the country plunged mainly due to the increase in the usage of bank cards and electronic banking, the report added.
Absa Group retail and business banking deputy CEO Bongiwe Gangeni said: “Cheque volumes in South Africa have fallen to 80% compared to ten years ago, making cheques uneconomical and commercially unviable.”
The South African Reserve Bank (SARB), the country’s central bank, reduced the legal value for issuing a cheque from ZAR500,000 ($29,775) to ZAR50,000 ($2,977) as compared to ZAR5m ($2,97,870) back in 2012.
In a report, SARB said: “A cheque is one of the oldest recognised payment instruments in South Africa and also globally.
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By GlobalData“However over the years with the ever-increasing usage, cost-effectiveness, efficiency and convenience of electronic payments such as cards and electronic fund transfers (EFTs) the usage of cheques have declined.”
Gangeni added: “Against this background, Absa has taken a business decision to exit cheques as a payment instrument from its product functionality by December 2020.”
Last month, Bank of New Zealand (BNZ), Australia and New Zealand Banking Group (ANZ) and Westpac also decided to phase out cheques for similar reasons.
