The high failure rate of cheques in the country is not the fault of the cheques themselves, say banks and ATM vendors. Nor is the UAE’s clearing infrastructure to blame.
Manufacturers of ATMs say that there are no technical reasons that cause more cheques to fail in the Emirates than other markets where the same technology is used and that recent improvements have made cheque use almost foolproof.
NCR, the world’s biggest vendor of ATMs by market value and a major manufacturer of cheque-counting devices used in the Emirates, said its cheque-acceptance systems were robust and there were no specific technological challenges causing cheques to fail.
“NCR specifically does not face any technical issues with cheque deposits on its ATMs,” a spokesman for the company said. A total of 1.4 million cheques were returned as invalid at the point of use last year, representing payments worth Dh46.8 billion (US$12.74bn), according to the Central Bank.
The proportion returned as invalid – about one in every 20 cheques – is nearly 10 times higher than in developed markets such as the United Kingdom.
The Central Bank does not distinguish in its data between cheques that fail for technical reasons and those that bounce.
Bouncing a cheque in the UAE is a criminal offence, although Emiratis have been immunised from being sent to jail for bounced security cheques. Customers whose cheques fail four times are cut off from the financial system, which can impair banks’ ability to recover funds if customers have debts spread across multiple lenders.
Read more: http://www.thenational.ae/thenationalconversation/industry-insights/finance/uae-banks-say-cheque-technology-not-at-fault-for-high-failure-rate#ixzz2PIDTjwtq
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