Select Page

Why you need to pay attention to the global decline in cheque usage

Why you need to pay attention to the global decline in cheque usage

By Johan van der Westhuizen

FNB Executive Officer: Business.

Globally, the use of cheque is consistently declining as financial institutions and most of their customers increasingly adopt technologically advanced payment alternatives that are far more convenient and cheaper.

In simple terms, cheques convey a written instruction to your bank to pay money from or into your bank account, and due to manual functionality in this process, there are substantial disadvantages that go with this option.

Over the years, the growing usage of electronic payment methods, high expenses, inefficient processes and vulnerability to fraud have been key contributors to the global decline in cheques usage. In addition, cheques do not offer users the convenience and relative security provided by digital payment solutions.

Namibia’s migration away from cheques has mainly been driven by customers embracing the convenience of emerging technology. However, there is a role for all financial institutions to educate customers about alternative payment methods and their added benefits.

Benefits for using alternative payment methods:

Digital migration – the global community is rapidly going digital, which means acceptance of digital payments is on the increase – customers and businesses are demanding instant and seamless integrated user-experience.

Value-added incentives – financial service providers are increasingly incentivising customers for embracing digital platforms. For instance, FNB rewards individuals with Cash Back paid directly into their linked savings pocket for adopting certain digital banking behaviour.

Save on fees – cheques still carry a higher expense for both the customer and their bank compared to digital payments which can be processed at a fraction of the cost.

Improved safety – Cheque fraud is a global phenomenon and Namibia is not immune, whereas digital platforms are equipped to help clients mitigate fraud at a click of a button.

Convenience – as written instruction to your bank to pay money from or into your bank account, the process in which funds move between banks is extended over several days, typically 7 days. Digital payments, which include Electronic Funds Transfer (EFT) and Card payments enable flow of funds to be done much quicker, and with little to no reliance on visiting the nearest branch.

The universal shift towards digital payments is rapidly emerging across societies and in markets such as the United Kingdom, we’ve seen dedicated working groups tasked with fact-finding around the future of cheques vs digital payments. We are also on the same mission to understand our customers’ needs and how we can help in adopting alternate payment methods.


About The Author

Guest Contributor

A Guest Contributor is any of a number of experts who contribute articles and columns under their own respective names. They are regarded as authorities in their disciplines, and their work is usually published with limited editing only. They may also contribute to other publications. - Ed.

Following reverse listing, public can now acquire shareholding in Paratus Namibia

Promotion

20 February 2020, Windhoek, Namibia: Paratus Namibia Holdings (PNH) was founded as Nimbus Infrastructure Limited (“Nimbus”), Namibia’s first Capital Pool Company listed on the Namibian Stock Exchange (“NSX”).

Although targeting an initial capital raising of N$300 million, Nimbus nonetheless managed to secure funding to the value of N$98 million through its CPC listing. With a mandate to invest in ICT infrastructure in sub-Sahara Africa, it concluded management agreements with financial partner Cirrus and technology partner, Paratus Telecommunications (Pty) Ltd (“Paratus Namibia”).

Paratus Namibia Managing Director, Andrew Hall

Its first investment was placed in Paratus Namibia, a fully licensed communications operator in Namibia under regulation of the Communications Regulatory Authority of Namibia (CRAN). Nimbus has since been able to increase its capital asset base to close to N$500 million over the past two years.

In order to streamline further investment and to avoid duplicating potential ICT projects in the market between Nimbus and Paratus Namibia, it was decided to consolidate the operations.

Publishing various circulars to shareholders, Nimbus took up a 100% shareholding stake in Paratus Namibia in 2019 and proceeded to apply to have its name changed to Paratus Namibia Holdings with a consolidated board structure to ensure streamlined operations between the capital holdings and the operational arm of the business.

This transaction was approved by the Competitions Commission as well as CRAN, following all the relevant regulatory approvals as well as the necessary requirements in terms of corporate governance structures.

Paratus Namibia has evolved as a fully comprehensive communications operator in Namibia and operates as the head office of the Paratus Group in Africa. Paratus has established a pan-African footprint with operations in six African countries, being: Angola, Botswana, Mozambique, Namibia, South Africa and Zambia.

The group has achieved many successes over the years of which more recently includes the building of the Trans-Kalahari Fibre (TKF) project, which connects from the West Africa Cable System (WACS) eastward through Namibia to Botswana and onward to Johannesburg. The TKF also extends northward through Zambia to connect to Dar es Salaam in Tanzania, which made Paratus the first operator to connect the west and east coast of Africa under one Autonomous System Number (ASN).

This means that Paratus is now “exporting” internet capacity to landlocked countries such as Zambia, Botswana, the DRC with more countries to be targeted, and through its extensive African network, Paratus is well-positioned to expand the network even further into emerging ICT territories.

PNH as a fully-listed entity on the NSX, is therefore now the 100% shareholder of Paratus Namibia thereby becoming a public company. PNH is ready to invest in the future of the ICT environment in Namibia. The public is therefore invited and welcome to acquire shares in Paratus Namibia Holdings by speaking to a local stockbroker registered with the NSX. The future is bright, and the opportunities are endless.