Cheque usage declines sharply

13 April 2017

Statistics contained in the Bank of Namibia’s annual report for the financial year ended 31 December 2016, show a steep decline in the value and volumes of cheques issued during last year. A total of 1,1 million cheques were processed during 2016, with a combined total value of N$10 billion, which represents a 60 percent decline in value from the N$27 billion recorded in prior year.

By comparison, 1,6 million cheques were processed in 2015, 8 million in 2014, 2,1 million in 2013 and 2,2 million in 2012.

‘’The continuing downward trend in volume and value is mostly due to the shift to electronic means of payment and the less efficient nature of cheques as a payment instrument when compared to cards and electronic funds transfers (EFT), ’’ the Bank of Namibia reported.

The Namibian banking industry reduced the cheque limit from N$500,000 to N$100,000 at the beginning of 2016, with the view to eliminate cheques as a payment instrument by 31 December 2017

By contrast, EFT transactions processed by Namclear increased in 2016, compared to 2015.

Namclear processed 17, 3 million EFT transactions to the value of N$260 billion in 2016, compared to 15, 6 million EFT transactions valued at N$236 billion in 2015.

According to the central bank, this increase in EFT usage reflects its efficiency and security as a method of payment versus instruments such as cheques.

The card payment stream (NamSwitch) also increased in volume and value during the reporting year when compared to 2015.

Namclear, through the local card switch, NamSwitch, processed 17, 9 million card transactions to the total value of N$9, 7 billion in 2016, meaning that the volumes and values switched increased by 16,9 and 20,2 percent, respectively, compared to 2015.

The card payment stream has continued on an upward trend in terms of volumes and values processed since the switch was localised in 2013.

According to a recent edition of Money Matters, a financial edition column by Bank Windhoek, cheque usage has been declining for some years, both for point of sale transactions (for which credit cards and debit cards are increasingly preferred) and for third party payments (for example, bill payments), where the decline has been accelerated by the emergence of mobile banking and online banking.

According to Bank Windhoek, being paper-based, cheques are costly for banks to process in comparison to electronic payments, so banks in many countries now discourage the use of cheques, either by charging for cheques, or by making the alternatives more attractive to customers.

The rise of automated teller machines (ATMs) means those small amounts of cash are often easily accessible, making it unnecessary to write a cheque for such amounts.


The Windhoek Observer is an English-language weekly newspaper, published in Namibia by Paragon Investment Holding. It is the country's oldest and largest circulating weekly.


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