Cross border cheques phased out
As from next Monday, 22 July cross-border payments within the Common Monetary Area (CMA) based on paper such as cheques and bank drafts will no longer be accepted by commercial bank as a valid from of payment.
Businesses and individuals still using this form of payment will have to look for other ways of transacting, as banks within the CMA will not accept these payments. The phasing out of cross-border cheques forms part of the implementation of the SADC Integrated Regional Electronic Settlement System (SIRESS) currently in progress.
For Namibian clients it means that as from 22 July 2013, no South African issued cheques can be deposited at any Namibian bank and that Namibian cheques issued to South African individuals or companies can no longer be deposited at any South African bank. Clients are advised to make use of Electronic Funds Transfers (EFT) for cross border payments in future.
However, both business clients, as well as individual clients, will still be able to make cross-border payments via Bank Windhoek’s EPAC Internet Banking Application or alternatively, Bank Windhoek offers over-the-counter internet-based cross-border EFT payments.
Cross-border cheques account for less than 1%of all cheque payments compared to approximately 10% of electronic cross border payments. For such a low volume of cross-border cheques, it is not economically viable to establish a separate inter-regional payment system for cheques as part of SIRESS, hence the decision to phase them out. The risk associated with cheque payments is also much higher compared to electronic payments.