GERHARD MUKUAHIMA THERE is a rapid growing international trend towards phasing out the use of cheques as a means of making payments and this is bound to change the payment landscape considerably in the near future.
In 2018, the United Kingdom will phase out cheques completely, following Germany – which phased out cheques more than eight years ago. Ireland, the Scandinavian countries and others in Europe have also voted some years ago to end the use of cheques. South Africa is expected to follow suit not long after the United Kingdom has completely phased out.
Namibia is set to end the use of cheques by December 2017 and already various mechanisms have been introduced to discourage its uses such as increases in fees and reduction in cheque item maximum limit now only at N$500 000. This may soon also be reduced.
Analysis has shown that the agricultural industry makes more use of cheques than any other sector, hence they are more impacted by the change.
Historically, of course, cheques have been an extremely useful way of eliminating the need to have cash on the farm and making payments to remote suppliers and even to employees. It is an easy way of keeping track of cash flow and used to be a safer way of transacting. However, with the prevalence of cheque fraud and slow processing; the improved security and ‘same day’ value of alternative payment options are becoming more attractive.
The advent of the Internet, and then cellphones, and now mobile Smart App, making banking by phone and online facilities possible, has made payments much easier, faster, and cheaper.
The remoteness of farmlands in the country make it challenging for some farmers to have consistent access to electronic channels. However, significant improvements have been observed in the Namibian telecommunication system which farmers can use to their advantage.
