Are the days of cheques numbered?


  • Nation
  • Sunday, 13 Apr 2014

Cheques are still among the preferred methods of payment here despite the risk of fraud.

CHEQUES will always be an important payment method so long as small businesses exist.

While acknowledging that e-payment is convenient, furniture shop owner Muhammad Abdullah, 48, says cheques are indispensable.

“For a small family-run business like mine, we need the current account facility because it allows us to issue post-dated cheques,” says Muhammad, who has a shop in Puchong.

“When customers delay paying us, cash flow is tight but suppliers demand immediate payment – this is where cheques come in handy.

“It really helps to keep the business rolling,” he explains.

Office boy S. Muniandy, 24, who was spotted depositing six cheques at a bank in Damansara, says the plastic manufacturing company he works for does not allow its sales personnel to collect cash payment.

“Cheques are more secure (than cash) as the money goes directly into the company’s account.

“We accept e-payment too but there’s still a lot of cheques to bank in every other day,” he shrugs.

A clerk in her 30s, who only wanted to be known as Chen, says many of her suppliers prefer cheques over e-payment, especially when there are large amounts involved.

“My boss usually pays by cheque. I suppose it’s good because if everything is done online, clerks like me would be jobless,” she muses.

Lawyer-philanthropist Datuk Seri Khoo Keat Siew feels that most donors are “more comfortable” with cheques.

“To most donors, e-payment is actual­ly an inconvenience,” says the Penang Cheshire Home president.

Khoo, who is vice-chairman of the board of trustees of George Town’s 214-year-old Goddess of Mercy Temple, says most donations received by non-governmental organisations are by cash or crossed cheques to prevent fraud.

“With cheques, it’s easy to keep track of donations coming in. And if a cheque bounces, there’s no loss to us.”

In February, The Star reported that two senior citizens nearly lost thousands of ringgit when their cheques were intercepted and tampered with in separate incidents.

In the first incident, a foreign national who paid his RM200 utility bill through cheques sent via mail was shocked to find that the amount deducted from his account was 10 times what he had written on the cheque.

In the second case, a pensioner wrote a cheque for RM169 payable to a bank’s card centre to pay for his insurance policy but discovered that RM4,600 had been deducted.

After internal investigations, the bank reimbursed both men.

On Sept 3 last year, father-of-three Wong Choong Leong, 46, mailed three cheques for RM20 to three different charity bodies, with only one cheque reaching its intended recipient.

The RM20 cheque turned into a RM12,000 loss after he discovered that all the payment details had been altered, except for his signature.

And, just three months ago, Penang police crippled a syndicate specialising in forging cheques following the arrest of two former bank employees and seizure of cheques worth over RM500,000.

The syndicate, which has been operating since 2011, were believed to have cashed cheques amounting to over RM1mil.

The modus operandi was to steal letters that contained ATM or credit cards and cheques from “pigeon holes” at office blocks.

The numbers on the cheques would then be replaced by a new set of numbers.

From 2010 up to Oct 15, 2013, the MCA Public Services and Complaints Department handled seven cheque fraud cases involving a total of RM61,916.20, according to its head Datuk Seri Michael Chong.

Despite the many fraud reports, senior citizens still prefer cheques to e-payment, Society of Active Generation of Elders president Chin Sek Ham says.

Unlike in the United States, many elderly people here are still not computer-literate, he adds.

The society has over 3,000 members.

“Someone paid me via online banking recently but I never received the money because he got my account number wrong.

“There are just too many digits and columns to fill out – it’s a hassle.

“E-payment can be quite intimidating and confusing for the elderly and the payee is not alerted when money is banked in,” he says, stressing that not everyone has a computer or a smartphone.

Federation of Malaysian Manu­facturers (FMM) vice-president Datuk O.K. Lee, however, calls on its 2,678 members to embrace e-payment instead of “old fashioned” cheques. He says even businesses in rural areas are moving away from cheques.

“I was in a small town in Kupang, Kedah, recently and forgot my cheque book. The shop owner turned on the WiFi and told me to just pay electronically,” he says, adding that the FMM council was pushing for a paperless culture in all its transactions.

Internet banking is gaining popularity among its members but the “overall system and infrastructure” needs improvement, he observes.

“The Malaysian Communication and Multimedia Commission (MCMC) should ensure that our Internet and WiFi connectivity is more stable.

“And financial institutions should make their e-payment systems more secure and user-friendly,” he adds.

Maybank Group community financial services head Datuk Lim Hong Tat encourages e-payment as it is secure with payment credited directly to the account of the beneficiary.

“This will be a great step forward to eliminating cheque forgery,” says Lim, who is also Maybank Singapore’s CEO.

The Malaysian Electronic Clearing Corporation Sdn Bhd (MyClear) stresses that e-payment is one of the safest payment methods around.

Besides functioning as a clearing house for cheques, the wholly owned Bank Negara subsidiary provides secure e-payment and fund transfer solutions to financial institutions, corporations, retailers and the public.

MyClear marketing and communications head Amy Pang describes e-payment as fast and convenient. It also offers a wide range of solutions for users.

She says those who still use cheques cite administrative ease and the ability to control payment as its advantage.

“Because cheques are physical pieces of paper, it is helpful for bookkeeping purposes. Some businesses use it to control the timing of their payments by issuing post-dated cheques,” she says.

“What many do not realise is that with e-payment, you can also schedule your future transactions.”

To facilitate high value payment, banks have increased the transaction limit for Inter-Bank GIRO (IBG) and online banking from RM5,000 to RM10,000, thus enabling some 90% of cheque transactions to be made via online banking.

Related Story:

Cheque forgers now using 'cut and paste' method to cheat

Bank Negara: Use online payment and mobile banking

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