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South Africa reduces cheque limits to boost the use of B2B epayments

South Africa B2B epayments
Checks can be written below $3,500 to encourage businesses to utilise more epayment options

South Africa is reducing the maximum amount limit for which paper cheques can be issued in an endeavour to boost the country’s usage of the B2B epayments

The Payments Association of South Africa has reduced the maximum amount for which a check can be issued to below $3500, according to reports published online.

The rule will be implemented from May this year, providing an extended timeframe of eight months for cheques that have been issued but are not yet processed.

FNB Business Spokesperson Kenneth Matlhole while admitting that businesses and government organisations would be handicapped by this policy as they are greatly dependent on cheques, stressed on the need for businesses to embrace this change at the earliest to curb cash flow disturbances and to coordinate with monetary service providers to execute a B2B epayment method in South Africa.

He added that the onus of preparing themselves for this new rule lay on businesses, which must prevail upon its vendors and clients to incorporate the alternative mode of payment.

Indicating that businesses in South Africa might probably provide rebates to persuade their B2B vendors to embrace epayments, Malthole stated that it might not be a feasible option for businesses to carry on with cheques due to the restriction imposed on the amount limit.

According to a survey conducted by Statista in the South African market, epayments are worth $8 billion and increasing in double digits at a compound annual growth rate of over 11 percent. This development can be attributed to the South African Reserve Bank’s Vision 2025 initiative that seeks to augment financial inclusion.

Cheques as the preferred mode of B2B payment is prevalent not only in South Africa but in several other countries as well. But, last September, a survey conducted by the Association of Financial Professionals discovered that the usage of cheques in B2B services had gone down to a great extent.

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