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Home Columns Business Unpacked

Do cheques have a future?

by Staff Writer
05/04/2012
in Business Unpacked
2 min read
0
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This week, the Bankers Association of Malawi (BAM) announced a stop to third party encashment of cheques over-the-counter effective April 10 2012. This means that if you draw me a cheque, either in my name or simply ‘pay cash’, I will have to deposit your cheque in my bank account.

In other words, gone are the days when one would draw you a cheque and you immediately encash it over-the-counter at an outlet of the drawer’s bank. On the other hand, cheque account holders are free to cash their cheques over-the-counter!

There are several reasons BAM has ‘banned’ third party encashment of cheques, including cases of fraud where some people have ended up dubiously encashing cheques.

Every time I request for a new cheque book at my bank I have always wondered whether I still need one, especially in this day and age when Internet and electronic banking are the in-thing, so to speak. For example, with Internet banking, one can make payments for goods and services or transfer any amount of money to a friend or business partner’s account at the click of the button, anytime and from any corner of the world even outside official banking hours.

Given the new technology, I look at cheques as old-fashioned, though they are somehow a convenient and secure means of making payments.

But now, with the new arrangement, I foresee many people and businesses, especially small-scale entrepreneurs, refusing cheque payments. This is so considering the slow process of clearing the cheques most banks subject customers to. In many cases, one waits for at least three business days (excluding weekends despite most banks operating on Saturdays) before their cheque is cleared or transformed into liquid cash.

If customers are to find cheque books, which come at a huge cost nowadays, relevant, I would request BAM to speed up the clearance process so that third parties quickly get their money from drawers. And, what happened to the electronic cheque clearance system that was highly touted as a solution to speedy clearance of cheques?

Please, improve on the shortfalls when the new system is introduced if cheques are to remain relevant now and forever.

Wishing you all a Happy Easter!

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