BoZ to Phase Out Cheques by December 2025
Bank of Zambia has disclosed that it plans to phase out the use of Cheques as a payment instrument by 31st December 2025, following a significant decline in usage in the last 10 years, among other factors.
The Bank revealed in a Brochure that the value of cheque transactions reduced from K39.2 billion in 2014 to K7.8 billion in 2023, representing 80 percent decline in utilization.
It said the other reasons for phasing out cheques include the high cost of payment processing infrastructure such as licenses, maintenance fees, software and printing of cheque books, while associated material remains elevated.
“Cheques in Zambia have been used for more than 116 years. However, over the last 10 years, the technological advancement has led to widespread adoption of electronic payment methods, resulting in a significant decrease in utilization of the Cheque.”
“For this, and many other reasons, the Bank of Zambia plans to discontinue the use of the cheque as a payment instrument, in line with the National Payment System Vision and Strategy 2027,” the Bank explained.
The Central Bank also observed that a cheque is highly prone to fraud such as forgery, alterations and theft of cheque books, on account of being a paper-based payment method.
“The cheque as a payment instrument may also not be honored during the processing cycle due to insufficient funds on the account holder and invalid signatures among other things, leading to reduced confidence in payment systems.”
“Delay in delivery of goods and services by businesses is another factor. Most businesses wait until the clearing process is completed before they provide goods and services, this hinders commerce,” it stated.
According to the Central Bank, the cost of investing in new infrastructure by the industry does not justify the benefits, given the migration to electronic payment systems.
The Bank has since provided alternative payment options which include Digital Bank Payments, Electronic Funds Transfer (ETF), Mobile Payment Systems, such as mobile money transfers and mobile wallets, Automated Teller Machine (ATM), Point of Sale (POS), and Remittance Systems, which refers to the money sent by one party to another within or outside the country.
