Standard Bank has advised farmers to think before they write that next cheque, as electronic banking is the way to go. The bank says there is a growing international trend towards the phasing out 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 have completely phased out. Namibia is set to also phase out cheques by December 2017 and already various mechanisms have been introduced to discourage their use such as increased 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 will be impacted by the change most,” said Standard Bank Namibia’s Head of Agriculture Gerhard Mukuahima.
“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,” explained Mukuahima.
With the advent of Internet, and then cellphones and now mobile Smart App, making banking by phone and online facilities possible, payments are much easier, faster, and cheaper.
Mukuahima acknowledged that 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 he believes farmers can use to their advantage.
He has advised farmers to acquaint or make use of alternative payment methods now rather than later and not wait until the last minute for the sake of convenience.