PAYNET Kenya has partnered with Finteq, a South African firm to offer Electronic cheque processing aimed at making cheques acceptance easier, safer and more cost-effective for banks.

The technology will allow Kenyan banks to electronically process and clear cheques and other EFT (Electronic FundsTransfer) data between their institutions and the Clearing House at Central Bank of Kenya.

Paynet and Finteq arejointly offering the electronic cheque processing with Paynet being the local representatives of Finteq. All Kenya Bankers Association member banks are presently required to adapt this kind of processing.

“I would like to acknowledge Finteq for realizing Paynet’s capacity to handle electronic cheque processing; Paynet is a progressive company, always looking for innovative techniques in electronic money handling procedures. I believe with the fast growing technology many institutions will adopt this new service so as to ensure efficient clearing of cheques and reduction of fraud,”said Bernard Mathewman, Managing Director Paynet.

He said the service will revolutionize cheque transaction in Kenya and serve customers the agony of waiting for long.

“This electronic process will help streamline the cheque acceptance process, reduce paperwork, and expedite closing, balancing and settlement. In addition, this new process presents the opportunity for substantial cost savings and superior customer sen/ice across the business,”said Rob Muller Commercial Director of Finteq South Africa.

With this technology, banks will capture the full front and back image of a cheque at the point of presentation and together with financial records and EFT data, electronically transmit those images to the Clearing House for exchange between banks.

Currently, banks have to build electronic files and submit them to the clearing house for clearing and settlement. Representatives from the banks then physically go to the Clearing House to exchange the physical cheque documents. This process is expensive, labor- intensive and increasingly subject to fraud and other risks.

There are a number of benefits that can be derived from the cheque truncation process. These include reduction of clearing time, particularly in remote/country areas where clearing periods are longer, via distributed capture. The service will also see a reduction in the costs of couriers due to not being forced to move paper on a daily basis and also a reduction in cheque substitution, which can be extremely costly to banks, not only in lost funds, but the time and effort put in by staff to track and trace these actions.

BY LUMITI KHABUCHI