Cheque limit

Photo: Tito Mboweni / Twitter

The highest amount you can pay by cheque in SA to ‘drop steeply’ in 2020

Still paying by cheque? Then you’ll need to read this – the maximum limit for what you can pay is dropping by 90% later this year.

Cheque limit

Photo: Tito Mboweni / Twitter

For many, a cheque book is a relic of bygone era, before plastic ruled supreme and we all went digital. For others – including our own Minister of Finance Tito Mboweni – they are an essential part of one’s banking armoury. However, the amount you can pay-by-paper is set from a dramatic decrease.

Cheque limits in South Africa: What is the most you can pay?

The Payments Association of South Africa (PASA) have confirmed that the biggest cheque you’ll be able to write for a payment in South Africa will be capped at R50 000. The paltry amount – worth little more than $3 000 – marks yet another sharp decline for this method of payment:

  • As recently as 2012, one could write a cheque for R5 million and have it cleared without a fuss.
  • But seven years ago, the limit was reduced to R500 000.
  • From May 2020, that number will see another zero slashed from its value, bringing the cheque limit to R50 000.

Why are they being phased out?

SARB published their National Payment System Department consultation paper at the end of 2018, indicating that the changes would be implemented by 2020. They are right on course to deliver that promise, and at the start of this year, industry experts are warning businesses to adjust their practices accordingly.

The consultation paper has since explained why South Africa’s financial authority is looking to limit the amount citizens can spend via cheque. According to SARB, the move will combat fraud and phase out one of the more “unsafe” payment methods available to banking customers – something Mboweni disagrees with.

“The SA Reserve Bank endorsed the reduction as it contributed to the protection of consumers, the reduction of transactional risks, and the fact that alternative payment methods are available to consumers.”

“To further reduce inefficiency and risks – considering that cheques are outdated, expensive to process, and vulnerable to fraud in the NPS – the payments industry, through PASA, has recently proposed to the SARB a further reduction of the cheque item limit.”

SARB statement