THE Bank of Namibia, in collaboration with the Payment Association of Namibia, and Namclear, last week announced that cheques have been phased out as a payment instrument in Namibia.
The last processing day for these cheques to be cleared by the payment stream was on Saturday.
In a joint media release, the three organisations said following the phasing out period, the deactivation and decommissioning process will be initiated, which involves ensuring that all cheque participant members in Namclear are removed from the payment applications, followed by the shutting down of the cheque payment stream entirely.
“As part of the Namibian National Payment System reform initiative to establish local payments infrastructure by the Bank of Namibia, the association, Namclear and the banking industry’s cheque system went live in September 2005, almost two years after the establishment of Namclear as the automated clearing house in November 2003,” the statement read.
However, the statement added that since 2007, there has been a decline in the cheque volumes and as an example, the volumes process over the past five years between 2014 and 2018 significantly dropped by 79,81%.
The three organisations explained that the move to discontinue cheques is not to inconvenience the public, but to reduce risks, such as fraud, inconveniences and costs implications.
“It should be noted that the cheque payment instrument is one of the most embattled instruments when it comes to fraudulent transactions, due to the conduct of cheque operations and the manual processes involved, which when compared to the alternative payment streams, prove to be inefficient,” they said.
The banking industry, will, however, continue to provide alternative payment methods and instruments such as Electronic Fund Transfers, card and electronic money.
Director of payments settlements systems at the central bank, Barbara Dreyer said: “In line with the our National Payments System (NPS)’s Vision 2020, as well as national strategies such as the fifth National Development Plan and Vision 2030, we are working towards achieving an internationally, reputable NPS.
“As a central bank, we will continue to create a strong and enabling legal framework to ensure a modernised payment system, while ensuring a safe and secure NPS,” Dreyer said.
