Today's Edition
HOSSAM ABDEL NABI (ABU DHABI)
Financial experts increasingly predict that paper cheques will soon vanish as digital payments become the norm.
Once the mainstay of financial transactions for decades, the use of paper bank cheques has significantly declined worldwide.
Modern technology has provided faster, safer, and more efficient alternatives, with electronic payments being made at the touch of a button, much quicker than paper cheques which take days to clear.
Transition to Digital Payments Despite the growing shift towards digital payments, some groups, such as the elderly and residents of remote areas, still rely on cheques.
However, governments and banks are pushing towards phasing out cheques, with plans to cancel personal cheques by 2027.
Hussain Al Qamzi, a financial economist and former CEO of Noor Bank and Noor Takaful, highlights that paper cheques are in an unprecedented confrontation with modern technology.
Statistics show that while paper cheques represented 85 percent of all non-cash payments in the 1980s, they now account for only 0.01 percent of total payments. Al Qamzi attributes this decline to the rise of faster and safer electronic payment methods.
He emphasises that a complete shift towards digital payments seems inevitable.
Digital Payment Trends Salima Jotieva, Vice President and Country Manager of Visa UAE, notes that the “Megatrends for SMEs” report by Visa highlights the growing transition to digital payments.
She explains that SMEs in the UAE are increasingly adopting digital payment options due to their speed and lower costs. Solutions like Tap to Phone and Visa Direct for cross-border transactions are in demand, reflecting the advantages of digital payments.
Jotieva points out that the UAE’s SME sector is thriving due to digital transformation initiatives, regulatory policies, and financing solutions.
Legal Regulation From a legal perspective, Ammar Anis, a legal consultant, states that paper cheques are still widely used, especially in commercial transactions, as they are legally binding debt instruments.
Although online banking services allow customers to schedule future payments, the debtor can cancel these payments.
Anis stresses the need for a secure legal system for digital payments to ensure creditors’ rights are protected.
Automated Cheques Mohammed Al Sayed, IT Project Management Consultant at the Sharjah Central Finance Department, explains that the digital payment service using automated cheques offers many benefits.
The system automates all digital payment procedures, eliminates manual processes, and provides participating entities with electronic scanning readers for bank cheques.
This system ensures precise governance between the cheque, customer, and entity, enabling the payment of fees for multiple transactions using a single cheque and automatic updates of cheque collection status.
