Cheques and chequebooks were revolutionary in their time but it seems their end is officially drawing near. Despite South Africa’s Finance Minister showing off his fresh cheque book on Twitter this month, major South African banks have decided to stop issuing them.
History of the cheque
The concept upon which cheques are built, the idea of instructing a bank or money lender to give another person a set amount from your account, has been around in some form for centuries.
However, the modern concept of the cheque has its roots in 18th Century England when the Bank of England started issuing pre-printed cheques which were printed on specific paper to prevent fraud.
From then on the use of cheques grew worldwide and led to international standards to help regulate and ensure their safe and effective use.
The cheque decline
After the cheques boom, because of their relative ease compared to cash, especially for big payments, the emergence of digital payments like credit cards, debit cards and electronic fund transfers quickly took over.
This was because although cheques were more convenient they were easy to fake, making cheque fraud a major problem. While digital payments aren’t perfect, they are significantly safer and can be updated for safety easier.
Banks removing cheques
In South Africa, cheques have held out for a relatively long time despite their declining use. Absa, Standard Bank and FNB have all announced they will stop supplying cheques either this year or next year.
The reasons for this are the same across the board, that the declining use and significant leap to online payments has meant the need for cheques is almost completely obsolete in the country.
The process will be a phased one, with banks first discontinuing special clearances, this will be followed by the banks stop on issuing cheque books and finally they will stop processing cheques entirely.