Understanding the Electronic Cheque Clearing System in Ghana

Abstract

The widespread use of bank cheques in daily life makes the development of cheque processing systems of fundamental relevance to banks and other financial institutions. Few studies on nature of Electronic Cheque Clearing System (ECCS) have also shown jurisdictional differences in the application of the technology. Despite its increasing adoption in Africa, no attempt has been made to model the process and highlight the challenges to drive policy changes. This study addresses this research gap by studying the nature of ECCS in Ghana to identify the inherent challenges. To achieve the objective, data was collected through interviews, observations and direct participation. Findings suggest that cheques go through five set of processes before they are cleared electronically; different from the four processes indicated in existing literature. These processes are Pre‑Conversion, Conversion, Transaction, Security and Storage. The pre‑conversion process depends on the banks objective, whilst some banks centralise the process to reduce cost, other banks decentralise the process to enhance service delivery to customers. The remaining processes are the same across all banks in Ghana. The study also found that security breaches at cheque printing houses, poor bank collaboration and manual cheque reviewing process are the main challenges facing ECCs.