“But you told us you have a bank account”, responded the institution’s accountant. “Yes, but I don’t want a cheque, I’m ready to wait for you to withdraw the money from your account and give me cash, responded the businessman.”
It sounds absurd that with all the technological advancements in the modes of payments for a good bought or service rendered, most Tanzanian sellers still prefer to be paid in cash.
We have other modes like cheque payments, direct transfer of funds to the beneficiary’s bank account and, more recently, mobile telecommunication companies have also made it easier for funds to be transferred electronically within mobile phones or between bank accounts and mobile phones.
With all these instruments around, still the most preferred mode for sellers of goods and services is cash.
Think of all the cash payments that you make and ask yourself why should this happen when we are in the 21st century?
We still have to order money transfers by filling bank forms, hence one has to be in the bank to carry out a transaction, money transfers within mobile phones have a limitation on the amount to be transferred, purchases through credit cards is restricted to few areas; this leaves payment through cheques as the most convenient means.
Issuers of cheques/buyers of a services or goods can issue cheques at their convenience. Sellers on the other hand are spared from the risks of carrying cash received from the sales they have made.
Moreover, with the possibility of the value of a cheque to be transferred from one person to another, cheque payments would have reduced the need to carry huge amounts of money.
Yet despite all these benefits, sellers prefer cash payments. Let’s explore some of the possible reasons leading to the negative attitudes towards cheque payments on the part of the sellers.
I stand to be corrected but my observation is that almost all cheques issued by individuals and institutions in this country are crossed sometimes with clearly visible ‘Account Payee only’ words added to the crossings.
This means that you are not only barred from transferring that cheque to someone else, but you also cannot get cash over the bank’s counters.
The cheque has to be deposited in your account waiting for it to be cleared. This isn’t something that one would want especially when that money is needed for settling an expenditure that cannot wait.
Imagine you are a seller who is not that liquid, so you want to get your money quickly to enable you purchase other products that are seasonal and the season is just around the corner. This waiting period may make you lose business; the only way to avoid such a loss is to demand for cash payment from your clients.
Another hurdle on cheques is the possibility for a drawer to play tricks that may result in either a delay or no payment made.
Imagine you have borrowed money from someone else with a promise that you will repay it back on a date you believe the cheque will be cleared and money will be in your account, only to be handed over with an unpaid cheque! Reasons for being dishonoured? “Not included in the cheque list, refer to drawer (no sufficient funds), signature differs, stopped cheque etc”.
How can someone issue a stop payment order on a cheque that he has just issued you? Why should your cheque be omitted from the cheque list without the office holders noticing? Are these not reasons enough to make you reject cheque payments especially when your instincts spot deceit?
I’m not suggesting that you will not get your rights but at what cost?
You can file a case at the court of law and get your rights but remember, the time that you are going to lose and the cost you are going to incur for filing that case in a court of law, moreover the person you are sending to court could be one of your biggest customers and suing him/her could mean the end of your business relationship. To avoid such risks why accept cheques?
I know that with the risks involved in moving around with hard cash everybody wants a more convenient way of settling financial obligations.
Banks and account holders need to do something to make people have trust in cheques.
If cheques will continue to be the least favoured means of payment, issuers will end up being the main users of their own cheques thus making those cheques no better than the normal savings withdrawal slips.
Of what use is a cheque account to you if you still carry huge amounts of cash to settle your obligations thus exposing you to the same risks that are faced by those who don’t maintain such an account?
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