Unity Infotech

Bahrain for digital payments innovation with E-cheque

Posted by Unity Infotech on December 26, 2019

Recent years have seen a tremendous increase in digital/online payments for e-commerce, utility bills or transfer money. The success of digitizing payments relies on developing adequate payment technologies. Mode of payment can vary from an electronic fund transfer/wire transfer, ATM transaction to cheque payment. Each of the payment processing has its own pros and cons right from ease of payment method to time taken for payment settlement. 

Cheques are one of the most commonly used conventional payment methods. Consumers are used to issuing physical cheques, however banks convert physical cheques into an electronic cheques by capturing cheque image thereby enabling the bank to process a cheque faster though electronic exchange of the cheque images.

In a move to spur electronic commerce and innovation to the digital payments, one such technology that is introduced is E-Cheque. An E-Cheque is an electronic document which substitutes the paper check for online transactions. Digital signatures (based on public key cryptography) replace handwritten signatures. The E-Cheque system is designed with message integrity, authentication and nonrepudiation features, strong enough to prevent fraud against the banks and their customers.

Let’s look at a scenario:

‘Sarah, was out of town on an official tour while she gets a call that her close relative that her uncle has met with an accident and was being rushed to the hospital. Her cousin who spoke to her said early funds are needed in the range of 50K USD would be needed urgently. While she had about 25K handy, there was obviously a shortfall.

Sarah immediately logged into her account to make an online transfer to her cousin’s account but was faced with a process roadblock where she had to first add her cousin as a beneficiary and then wait for the next 24 hours before he could initiate the transfer. Thankfully, she had a fall-back option, the E-Cheque app that she had installed only recently but not yet used. She opened the app and issued an E-cheque in her cousin’s name using a secure validation method. Soon she shared the E-Cheque with her cousin, who in turn used it to deposit the cheque in his account quickly.’

Digitization of the cheque-related processes including issuing, writing and depositing, is further simplifying banking transactions for millions. While it is indeed of help in emergent situations like the one exemplified above, it also offers a mid-path solution for those who are embracing online banking for certain processes but are not yet fully comfortable in doing away with the cheques altogether specially for the corporates.

Moreover, online cheques also offer certain safeguard mechanisms that would turn out to be valuable in protecting a user’s interests while easing the process of cheque writing, issuing and depositing much easier while avoiding physical presence evidently as much as possible. One such country that’s implementing E-cheque for its customers is Bahrain; one of the first countries in the Middle East. Bahrain being one of the fintech hub for innovative payment methodologies will be launching E-Cheque for millions of its consumers in the region.

With the domain expertise of maximum number implementations in Image based cheque clearing in UAE, Unity Infotech, has become one of the leading and trusted technology partner for Bahrain member banks to launch an innovative financial technology to the market. Unity Infotech’s E-Cheque Direct being implemented in close to 9 banks in Bahrain is being intensively tested with utmost automation and precision to go-live in April. Learn more about E-Cheque Direct here!