Bye, bye cheque
The demise of the old-fashioned cheque at the hands of the Internet was helped on its way today with an announcement that its maximum allowed value in South Africa would be slashed by 90%. SEAN BACHER reports.
It has been announced that, with effect from the 16 July 2012, the maximum value for which a cheque can be written in South Africa will be reduced from R5-million to R500 000.
"After consideration, the Banking Industry has decided to reduce the cheque item limit from R 5 million rand to R 500,000.00," said Keith McIvor, Director: Business Transaction Products at Standard Bank.
This means that cheques written above the value of R500 000 after 16 July 2012 (the implementation date) "will not be processed for value", i.e. the maximum value of a cheque will be no more than R500 000.
"It is important to note that this is an industry wide initiative and will not be implemented by Standard Bank alone," said McIvor.
The demise of the cheque as a prime form of payment of large amounts has been heralded ever since electronic funds transfers began taking off during the 1990s. Today, EFT and other forms of Internet transfer are regarded as far more secure than paper cheques, which have become all but an anachronism. And they are cheaper than cheques.
Two of the three main options offered by Standard Bank as alternatives to cheques are in fact Internet-based. These are:
o Business Online
o Internet banking
o ATM banking
"If you make regular monthly payments, standing payment orders (stop orders) or debit orders can be used instead of cheques, and if you have a cheque card you can pay directly at a point of sale by using your card," said McIvor. "Please consult your banker who will provide you with a range of cheaper, more secure and faster alternatives to cheques."
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