Windhoek – The Bank of Namibia, Payment Association of Namibia and Namclear last week announced the discontinuation of cheques as a payment instrument within the national payment system.
The effectiveness of this decision started from June 30, 2019.
The last processing day for the cheque to be cleared by the cheque payment stream took place on Saturday, June 29. The deactivation and decommissioning process will be initiated, which involves making sure that all cheque participant members in Namclear are removed from the payment applications, followed by the shutting down of the cheque payment stream completely.
As part of the Namibian National Payment System reform initiative to establish local payments infrastructure, undertaken by the Bank of Namibia, the Payments Association of Namibia, Namclear and the banking industry, the cheque system went live in September 2005, almost two years after the establishment of Namclear as the automated clearing house in November 2003.
It was reported that the industry embarked on a cheque strategy, with incremental reductions to the cheque item limit over the years. Taking into consideration the risks to the national payment system associated with the initial high cheque item limit of N$5 million, the limit was reduced to N$500 000 through the issuance of the determination on the reduction of the item limit for cheque payments within the system (PSD-2). In 2015, the item limit was reduced to the current N$100 000.
These efforts not only assisted in mitigating the fraud risks relating to the cheque payment instrument, but also taking a phased approach towards the ultimate phasing out of cheques.
Coupled with this, the industry has noted a move in Namibia towards the non-acceptance of cheques by the business community. Since 2007, there has been a steady decline in the cheque volumes and as an example, the cheque volumes processed over the past five years between 2014 and 2018 significantly decreased by 79.81 percent.
Therefore, the move to phase out cheques by the banking industry is a decision that is supported with the intention not to inconvenience the public, but to minimise the risks, such as fraud, and in due consideration of the inefficiencies and costs associated with cheques as a payment instrument.
The Namibian banking industry will continue to provide alternative payment methods and instruments such as electronic funds transfers (EFTs), card and electronic money (e-money).
“In line with our NPS Vision 2020, as well as national strategies such as the NDP5 and Vision 2030, we are working towards achieving an internationally reputable national payment system. As a central bank, we will continue to create a strong and enabling legal framework to ensure a modernised payment system, while ensuring a safe and secure NPS,” noted Barbara Dreyer, Director: Payments Settlements Systems at Bank of Namibia.
2019-07-02 10:15:57 | 1 years ago