The Payments Association of South Africa
(PASA) has agreed to reduce the maximum value for which a cheque
can be written.
The current maximum value per cheque is R5m
and will be reduced to R500, 000 as of 16 July 2012.
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High value cheque fraud is one of the main
reasons for the reduction.
Less than 1% of cheques are signed for values
above R500, 000, however these high value cheques account for more
than 40% of the total industry fraud losses.
PASA expects the reduction of the cheque
limits will curb cheque fraud.
Walter Volker, CEO of PASA associated the
continuous decrease in cheque volumes with the number of different
electronic payment options which are deemed safer, faster and
cheaper.
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By GlobalData“South African customers now have a variety of
payment options at their disposal, including card, internet and
mobile payments,” said Volker.
The announcement comes after Cards
International reported earlier this year that cheques in the
UK were to be phased out by 2018 – a scenario that PASA what to
distance itself from.
“The reduction to the cheque item limit is
certainly not a strategy to do away with cheques. Although the use
of cheques has been declining rapidly – 24% year on year for the
past five years – further analysis is required before any major
decisions on the future of cheques are taken.”
The South African Reserve Bank has also
endorsed PASA’s decision.
