Seychelles to phase out cheques for financial transactions from 2025

Commercial banks and Seychelles Credit Union (SCU) will stop issuing cheque books for individuals as of January 1, 2025. (Seychelles Nation)

As of May 1, 2025, Seychelles will gradually phase out the usage of cheques in financial transactions as the country looks to move towards a more digitalised financial system.

This decision was taken after the Central Bank of Seychelles (CBS) saw a decline in the number of financial transactions through cheques while those through digital channels were on the rise.

This will be done through a phased approach where commercial banks and Seychelles Credit Union (SCU) will stop issuing cheque books for individuals as of January 1, 2025. The deadline for banks to stop accepting cheques from individuals is May 1, 2025.

Additionally, commercial banks and Seychelles Credit Union (SCU) will stop issuing cheque books for non-individuals as of January 1, 2026, and will stop accepting cheques from non individuals from May 1, 2026.

The director for financial inclusion and market conduct at CBS, Liz Julienne, told reporters that in 2023, approximately 600,000 cheques were used in transactions. In comparison, those through card and Seychelles Electronic Funds Transfer (SEFT), were over 10 million.

Julienne explained that during their observations, they had noticed several issues associated with the use of cheques.

"One of these issues is that some people use cheques as a credit facility. By that I mean that someone can pay for a commodity using a cheque, knowing they do not have that money in their account, but the cheque is used as a delaying tactic, to allow the person to find that money and deposit it in the account, before the cheque itself is deposited by the seller," she explained.

Julienne said this has caused a lot of problems as many times the cheque bounces and this has caused many retailers to stop accepting cheques as payment for the goods.

Before taking this decision, CBS says that they had numerous conversations and consultations with the private and public sector, and other businesses, and from that, a number of concerns were identified.

The concerns included the risk of financial exclusion for certain segments of the population who are reliant upon this type of transaction, insufficiently reliable digital options, fees and charges associated with using digital financial solutions. It also includes the cost of the internet and mobile devices to access these solutions, as well as the possibility that it increases the usage of cash, which is contrary to what CBS wants to achieve.

The CBS said it continually works with various partners to ensure that all these concerns are addressed so that these transitions can be as smooth as possible.

According to statistics presented by the CBS, most local banks have alternative payment solutions to cope with this phasing out process. All eight banks operating in the country have Internet banking platforms for individuals and businesses, although not all of them at the moment have debit cards, mobile apps or point of sale (POS) machines.

"The reason we have decided to talk about this now even if the changes will take effect next year, is because we want the individuals and businesses to enter into a conversation with their banks now so that they can find out what other solutions are available to them," added Julienne.

She emphasised that even if someone receives a cheque before May 1, 2025, and goes to the bank to deposit or cash after that date, it will not be accepted.