Goodbye, good ole cheques

On September 28 this year, the Reserve bank of Malawi (RBM) announced that the use of cheques ends in March 2027.

The public notice, made in conjunction with the Bankers Association of Malawi follows the publication of the Bills of Exchange (Amendment) Act of 2026 in the Malawi Government Gazette Supplement, an official publication of government notices.

The decision effectively phases out the issuance and use of cheques as a payment instrument in Malawi.

The abolishment of cheques is in line with Malawi’s National Payments System Vision and Strategy Framework for 2026 to 2030 that RBM launched in April 2026.

This follows other policies the regulator of financial services used as a roadmap in developing and improving the country’s payments system ecosystem.

The strategy has five strategic objectives aligned to achieve a modern, inclusive and resilient national payment system.

The pillars include promoting digital financial services adoption and usage.

The targeted initiatives under this objective include phasing out of cheques and lowering the cost of digital financial services.

In phasing out cheques, consumers, businesses and institutions have an alternative option of using electronic payment methods such as electronic funds transfer (EFTs), credit and debit cards, internet banking, mobile banking and mobile money services.

Malawi is currently in the transition phase, restricting banks from accepting cheques presented after September 29 2026.

The new policy allows banks to process up until March 2027 all cheques that were presented for clearing before or on the September deadline.

Other African countries such as Botswana, Eswatini, Lesotho, Namibia, South Africa and Zambia have made similar decisions.

Namibia banned the use of cheques as early as 2019, followed by South Africa in December 2020, Lesotho in September 2021, Eswatini in January 2022 and Botswana in December 2023.

Our neighbours in Zambia stopped processing cheques in June this year.

Cheques were once a popular paper-based payment instrument in Malawi. They were widely used by individuals, businesses and government agencies for payment of goods, services and other financial obligations.

Institutions often issued cheques to pay their employees’ salaries and suppliers’ invoices, among other things.

Individual account holders were often seen writing out cheques for payment of goods at the supermarket or drawing out cash from a bank teller.

Banks even had dedicated counters for cheque deposits and encashment.

However, in the past nine years, RBM has continually reported a steady decline in the use of cheques.

The reported figures showed a decline in transaction volumes from 22.4 percent in the fourth quarter of 2025 to a 16.6 percent decline in the first quarter of 2026.

Although cheques were once a great alternative to carrying cash and reducing risk associated with high-value transactions, they are prone to fraud since a signature can be forged.

Cheque processing is lengthy and inefficient as it normally takes two to three working days to clear.

Financial institutions require specialised systems and infrastructure, which is expensive to maintain.

Besides, cheques are not friendly to the environment since they are made from paper and also require printing.

E-payment methods pave the way for real-time transactions, leading to faster settlement of funds and increased efficiency.

The systems are more secure as they use passwords, biometrics and PINS.

In some instances, they require a one-time-pin for authentication, which mitigates against fraud.

It is indeed time that the whole country lets go of inefficient and obsolete systems, which are costly, time-consuming and hazardous to the environment.

The switch to technologically advanced systems and solutions will drive economic growth, inclusivity and efficiency.

Using electronic payment methods will drive the adoption of digital financial services, which is a catalyst for a robust and modern economy.

This however will only be achieved if digital financial services and solutions are made affordable for consumers.

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