Growth in usage of cheques has slowed down in the last decade, losing out to digital payments channels which are more efficient for businesses and individuals.
The Central Bank of Kenya (CBK) said in its 2022-2025 national payments strategy that the paper-based payment channel will need reforms as part of the alignment of the automated clearing house (ACH) with emerging global practise that is marking a shift away from cheques.
While the value of cheques went up from Sh2.05 trillion in 2011 to Sh2.54 trillion in 2021, the number issued in the payments fell from 18.2 million to 16.4 million in the period. Meanwhile, the volume of cash transacted through mobile money agents rose by nearly six times to hit Sh6.87 trillion in 2021, from Sh1.17 trillion in 2011.
Bulk payments made through real-time bank transfers have also gone up by a significant margin, from Sh21.9 trillion in 2011 to Sh34.55 trillion last year.
“At a broader level, cheque volumes and values continue to fall, as individuals and businesses make greater use of electronic payment instruments, particularly during the Covid-19 pandemic,” said the CBK.
In Africa, the CBK gave an example of Namibia and South Africa which in 2019 and 2020 respectively phased out the use of cheques as a payment instrument and directed payments to alternative electronic payments methods.
While CBK did not indicate whether it is mulling an upward or downward change in the cap, it noted that it would need to mitigate the risk of excluding businesses and individuals who still rely on cheques as the only means of making payments.
– Business Daily