Digital payments favoured

THE Papua New Guinea Chamber of Commerce and Industry (PNGCCI) has supported the Bank of Papua New Guinea’s (BPNG) move to discontinue use of cheques in the private sector in favour of digital payment systems.
PNGCCI president Ian Tarutia said digital payments were in real time, cut down manual intervention, reduced the chance of fraud, and was less costly, and convenient for users.
“The announcement is timely and will compel business houses who have not updated their payment systems and processes to do so with urgency,” he said.
The announcement to discontinue use of cheques and move to digital systems was made by the National Payments Council (NPC) in a meeting this week.
This decision came after improvements in clearance times of cheques following the launch of the Kina Automated Transfer System in 2013, BPNG still saw risks for fraudulent use and longer processing times, including convenience that were considered with the use of cheques.
The decision to move toward a digital system of payments is in line with BPNG’s National Payments Strategy Development Plans (NPSD) which will foster greater inclusion financial inclusion with safe and convenient digital payments.
It also aims to lower costs of payments to customers and provide easier access to funds without cash handling or cheque clearance dates.
BPNG acting governor Elizabeth Genia told The National that there was a fee of 33 toea which used to be charged when a cheque issued by banks and other financial institutions were used as an instrument of payments.
However, this would no longer be applied because when the private sector cheques are discontinued by Dec 31, 2023, there will be no fees applied to those digital transactions.
“The private sector will no longer use cheques as a mode of payment to pay for goods, services or other creditors,” Genia said.
“The private sector will move towards using electronic payments to pay for services rendered to them.
“The private sector is made up of big companies and private individuals.
Waterfront shop, Steamships, City Pharmacy Ltd and Datec are four examples.
The commercial banks will have to give further clarification on private individuals or small businesses if they too are affected.”
Genia said that the Government had already started using electronic payments for some of its large transactions at BPNG when it wanted to send funds to commercial banks.
She said the banking system is capable of serving the government by using electronic payments.
The Government, through Department of Finance and Department of Treasury are members of National Payments Council and discussions are still in process to finalise their plans on the end date to discontinue the use of government cheques.
BPNG customers were urged to use mobile and internet banking to leverage the convenience and efficiency of these technologies as it eliminates the need for additional costs of travelling to a bank to access cash deposit cheques.