Good day to you all. It is safe to say the first quarter of the year has officially come to a close. During this time, we have conversed on quite a diverse range of issues around digital transformation, which I have enjoyed immensely.
A Greek philosopher named Heraclitus once said change is the only constant in life. I make it a point to read “Who Moved My Cheese” by Spencer Johnson every year to assist me further my prospects in business and in life. If you are experiencing a little turbulence mid-flight 2023, please rest assured that you will be okay. The human species is resilient and always finds ways to adapt even in the direst of circumstances.
We also get the opportunity to enjoy a little bit of respite as we go into the Easter holidays and as most schools go into first-term breaks. This is an excellent opportunity to catapult ourselves into the rest of the year. I pray for all safe travels and your return to your homesteads and places of work.
In the last chat, we glossed over the impending discontinuation of cheques in 2024. To refresh your memory, come 31st December 2023 and cheques will no longer be accepted as a form of payment.
Consumers have various needs for sending and receiving payments, such as family communal needs, payments for assistance in domestic assistance, farming pursuits, business dealings, paying suppliers, and receiving payments from clients. This impact will be felt by individuals who do not currently have a mobile money wallet or primary bank account and are correspondingly not comfortable with using Automated Teller Machines.
The example of these individuals will be, for instance, those engage in temporary work, i.e. farm workers and temporary workers engaged in government aid schemes. In these instances, cheques are issued to individuals here in transferring the risk of holding cash to financial institutions.
We are aware of the various risks following the cash-in-transit heists that have regrettably been happening in our country. Some of these institutions also may receive cheques as promisory notes for future payments on goods and services received.
The question then remains why do people still continue to use cheques and cash as a form of payment?
- Ineffective Reference Validation Platforms: Institutional clients who receive a high volume of payments still have issues ensuring adequate reference validation which is required to allocate services to a client and financial reconciliations. Some revert to manual reconciliations, resulting in overtime and customer inconvenience.
- High commissions on transactions: Some collection agreements are not favourable to emerging businesses which ultimately pass on the cost to their consumers. A motion was made by various institutions in a bid to incentivise using digital payments and to penalise use of cheques and cash. The proposal has produced some fruit, as can be seen in the seemingly empty banking halls even during traditionally peak periods.
- Lack of Investment in Technology: Oddly enough, some of the larger businesses have not invested in the right technology, including a line of business systems which will lead to countless frustrations in trying to integrate with their financial services providers.
- Ineffective Cyber Security: The risk of fraudulent transactions and their resultant loss has now been transferred to the institution/or customer. The general feeling is that digital transactions are not safe due to cybercrime.
- Lack of customer training on digital platforms: Some customers are not tech-savvy and will rather not receive a payment from a digital platform. This is also heightened by the fear of being scammed on digital platforms.
- ‘System e down’: This is one of the many instances that damage customer confidence in payment platforms. There are times when platforms are not accessible due to service disruption. It may just be better to receive cash than to lose out on a sale.
Organisations need to engage in reviewing their customer journeys, system integrations, and the processes that may inhibit their ability to attract and retain their clients. They also need to invest heavily in understanding how to fix problems when platforms are not available to transact.
Montwedi ‘Monty’ Bakwena is a Digital Transformation Professional with a focus on issues of customer experience strategy, digital operations integration, channel migration, and public-private partnerships.
@LinkedIn _Montwedi Bakwena