In April 2025, the Bankers Association of Malawi (BAM), in conjunction with the Reserve Bank of Malawi (RBM), announced the phasing out of cheques in Malawi by 31 December 2025. This is also subject to amendments to the Bills of Exchange Act by the Malawi Parliament. However, at Centre for Policy and Research on Digital Society (CPRDS), we welcome this bold move that pivots Malawi into the global shift towards digital payments.
It is common knowledge that cheques have low demand (used by only about 2% of bank customers in Malawi), are vulnerable to fraud, have slow clearing cycles, and have high operational costs for banks. The transition to digital payments will, therefore, help to address these bottlenecks.
Nevertheless, at CPRDS, we believe that for this transition to take place successfully, Malawi needs to address critical issues with respect to infrastructure, digital skills and literacy, policy and regulation, among others.
Insufficient digital infrastructure backbone in the country hinders service delivery. It is not uncommon to learn that digital banking channels are not accessible due to ‘network challenges’, among other issues. Service providers to banks face a lot of challenges, including fiber cuts and power outages. Further to this, Internet bandwidth remains expensive and not accessible to many. It will be, therefore, critical for banks and the country at large to invest heavily in necessary infrastructure that can drive this transformation.
It is not uncommon to learn that digital banking channels are not accessible due to ‘network challenges’, among other issues.
Banks also need to invest heavily in awareness about this transition, as there are, generally, low digital literacy rates, particularly in rural areas, which can also limit uptake of digital payments. Furthermore, cybercriminals exploit low digital literacy to scam digital payment platform users. A case in point being mobile money platforms such as Airtel Money and TNM Mpamba. In other words, phasing out cheques does not necessarily eliminate payments fraud and criminality.
It is also imperative that bank service charges and other taxes levied on users of digital payment platforms are revised downwards. It is burdensome for customers to be charged heavily for simply using a digital payment platform. This is not only contradictory to the promotion of the uptake of digital payments but also unfair to bank customers who are now being encouraged to migrate to digital platforms.
Once again, at CPRDS, we wholeheartedly welcome this bold move by BAM and the Reserve Bank of Malawi. However, concerns raised above, and also by other stakeholders, need to be given serious consideration if the country has to have meaningful digital transformation with respect to digital banking.
0 Comments