JAMAICA is set to eliminate cheque usage in the next two years as the Bank of Jamaica (BOJ) and Jamaica Bankers Association (JBA) have set a March 2028 timeline to discontinue the use of cheques, in lieu of electronic transactions.

The Bank of Nova Scotia Jamaica Limited (BNSJ or Scotiabank) and First Global Bank Limited (FGB) recently emailed their customers to indicate that cheques equal to or greater than $1 million will no longer be accepted as of September 1. That will be followed by a $500,000 limit by March 2027, a $100,000 limit by September 2027, and a full discontinuation of cheques on March 1, 2028.

“These changes now form part of a broader, industry-wide initiative led by the Bank of Jamaica (BOJ), in coordination with the Jamaica Bankers Association (JBA), to progressively reduce and eventually eliminate cheque usage in Jamaica while encouraging the use of safer and more efficient electronic alternatives,” FGB said in a May 26 email to customers.

The new $1-million limit was originally set for June 1 but that date was revised in line with a series of new cheque limits.

The BOJ did move forward on June 1, however, with the changes to the ACH fee structure. Instead of the flat $5,750 penalty that was applied to any ACH debit transaction (cheques and online transfers) above $1 million, there will now be an ad valorem charge which will be phased in from 0.5 per cent to 2.00 per cent over the next 18 months.

According to a schedule provided by FGB, a $10-million transaction done via ACH is now subject to a $50,000 charge as of June 1. That charge goes to 1.0 per cent on December 1, to 1.5 per cent in June 2027, and 2.0 per cent in December 2027. This means there is now a larger disincentive for a banking customer to do ACH transfers above the $1-million threshold.

The BOJ’s 2025 annual report revealed that the number of direct debits and credits processed via the ACH system grew six per cent to 14.6 million transactions, with the value rising 17.4 per cent to $1.2 trillion. The ACH threshold was lowered from $3 million to $2 million in 2013, and to the current threshold in May 2016.

“For transactions at or above this amount, we encourage you to use our Real Time Gross Settlement (RTGS) service. RTGS is available online and in branch, and provides a secure, reliable and fast way to transfer funds. It also makes it easier to track transactions for your records,” Scotiabank Jamaica told customers in a June 30 email where they noted that cheques above $1 million will no longer be accepted or issued by the bank.

These moves form part of the BOJ’s push to reduce systemic risk and move more high-value transactions into the RTGS system. The BOJ controls the RTGS system, which has direct participants with commercial banks and primary dealers who are specifically designated securities dealers. The ACH infrastructure is owned and operated by Automated Payments Limited (APL), with operations executed via J.E.T.S. Limited. These two entities are owned by various deposit-taking institutions (DTIs).

Cheque usage in Jamaica has been on a steady decline over the last two decades. Jamaica’s ACH system processed 8.9 million cheques in 2010 valued at $2.3 trillion. The number of cheques processed in 2025 declined 12.6 per cent to 2.4 million cheques with the value falling 6.9 per cent to $444 billion.

The value of Jamaican-dollar (JMD) transactions processed via the RTGS system rose from $16.8 trillion in 2020 to $26.9 trillion in 2025. That shift was facilitated by operational changes made by the BOJ and an increase in economic activity in the overall economy. The BOJ made a policy change on May 12 which will allow eligible credit unions to directly participate in the RTGS system.

While the move to reduce cheque usage will lower cheque handling costs for banks, it will also benefit their earnings as more transactions pass through the RTGS system. The BOJ charges each JamClear®-Central Securities Depository (CSD) participant $30 per RTGS transaction, a reduction from the $100 charged in 2019.

National Commercial Bank Jamaica Limited (NCBJ) and JMMB Bank (Jamaica) Limited recently increased their incoming and outgoing RTGS fees charged to customers. Thus, with the BOJ charging less per RTGS transaction, both banks benefit from increased transaction fees. There is a fee to send and receive an RTGS transaction in the Jamaican banking system while the ACH transaction method might have a charge for the sender. Scotiabank Jamaica introduced a $19.55 fee for ACH transactions on June 1, eliminating what was previously a free service to customers.

It’s unknown how the move to discontinue cheque usage will impact the average consumer and business in the next two years. Cheques are preferred by some persons who are not comfortable with electronic systems, and act as a medium for payments to be settled between parties. Currently, when an investor on the Jamaica Stock Exchange (JSE) doesn’t have electronic instructions for dividend and interest payments, the payment is remitted to the investor through a physical cheque for them to access their legally entitled payment.

Also, not every commercial bank offers ACH services online, while RTGS fees can have a combined $200 to $600 cost the sender and receiver. This is also impacted by the timing of when a bank credits funds to a recipient for an ACH or RTGS transaction. With Jamaica still recovering from Hurricane Melissa, will the elimination of cheques be a benefit in the event of another major natural disaster?