28 Jun 2019 14:40pm
WINDHOEK, 28 JUN (NAMPA) - The last processing day for a cheque to be cleared will be Saturday, after which cheques will be discontinued on Sunday, the Bank of Namibia has announced.
According to a joint media statement issued by the central bank, the Payment Association of Namibia and Namclear on Thursday, the move to phase out cheques supports the intention not to inconvenience the public, but to minimise risks such as fraud.
The decommissioning and deactivation process will be initiated, which involves making sure that all cheque participant members in Namclear are removed from the payment applications, followed by the complete shutdown of the cheque payment stream completely.
The cheque system went live in September 2005, almost two years after the establishment of Namclear as the automated clearing house.
However, there has been a decline in cheque volumes since 2007 due to non-acceptance of cheques by the business community, the statement added.
The cheque volumes processed over the past five years between 2014 and 2018 significantly decreased by 79.81 per cent, it added.
The industry embarked on a cheque strategy with incremental reductions to the cheque item limit over the years, whereby the initial high cheque item limit was N.dollars 5 million and was reduced to N.dollars 500 000, and then N.dollars 100 000 by 2015.
These efforts were made to assist with mitigating fraud risks related to the cheque payment instrument and to take an approach towards phasing out of cheques.
It should be noted that the cheque payment instrument is one of the most embattled instruments, when it comes to fraudulent transactions, due to the conduct of cheque operations and the manual processes involved, which when compared to the alternative payment streams such as electronic funds transfer and card, prove to be inefficient, the statement added.