Kenya: Safaricom Picked for E-Cheque System
Kenya Bankers Association has awarded Safaricom a five year contract to provide data services in implementing the recently launched cheque truncation system. The service provider will connect all 42 commercial banks participating in the project and the Central Bank with high capacity Wide Area Network links to facilitate the transmission of cheque images and data."Telecommunication is the backbone on which the cheque truncation project rides, the choice of a networks communication supplier was a key project consideration and rigorous selection criteria was put in place," said Habil Olaka, CEO of KBA during the signing ceremony last week.
Cheque truncation involves a process where physical cheques presented for payment in a bank by individuals or companies are converted to electronic form and the image is then transmitted electronically to the clearing house for processing and eventual payment by the paying bank.
Safaricom through its Enterprise Business Unit has already done the interconnection and banks have started implementing the new system. The deadline for the old cheque clearing system is May 31.
Cheque truncation is expected to result in faster clearing time, reduced charges for customers and reduce avenues of fraud emanating from cheque substitution."The aim is to have cheques cleared in at most 2 days in the urban areas and four days for up-country consumers, which calls for a reliable ,wide reaching network," said Olaka.