LEGAL PERSPECTIVE: Electronic Cheques by Dr AbdelGadir Warsama, Legal Counsel

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Dr AbdelGadir Warsama, Legal Counsel

Central bank of Bahrain (CBB), moved on to authorize the use of e-cheques. This step gives impetus to e-banking transactions in Bahrain and could add great value to all e-transactions and e-commerce. People, may need some time to comprehend the new process, just like what happened when ATMs were newly introduced. Therefore, banks and Benefit Co. shall take the lead to explain and educate all about this new good and practical concept. Now, irrespective of the problems coming from ATMs usage, they are widely used by almost all bankers.

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The electronic cheques transactions use the information found on the cheque given by any person to carry out a single electronic funds transfer. This is almost like, a debit card transaction, the user is required to prepare the e-cheque, to put the e-signature and send. This will be undertaken through the e-cheque app for companies or through Benefit-Bay for individuals.

Commercial activities and banking businesses need to follow the e-march as it becomes a clear fact of live.

The use of e-cheques is having many advantages to businesses including faster processing as business will get its money faster, moreover, to any one by improving access to goods and services particularly for customers not having debt or credit cards. In such instances, business that accept e-heques can provide access to goods or services that might otherwise remain unavailable to some potential customers.

Businesses using e-cheques spend less money on cheque processing fees and could devote more financial resources to core operations. E-cheques require less hands-on labor which allows the business to reduce its overall labor force or devote that employee time to customer service and other efforts. However, this new development is not risk-free as to what is happening for all e-transactions. All e-cheques are processed by computers, there could be computer errors leading to wrong withdrawals or the like and I believe we need time to overpass this havoc. Also, hackers or others can easily get access to the banking information. Some fraudulent businesses also offer e-cheques as a trap to get others to hand their banking information. However, we suggest that nobody to provide e-cheques info to businesses they do not know and trust, whether online or over the phone. Likewise, legitimate merchants are obliged to provide customers with transparent information about how they process e-cheques and other necessary info. At this starting time, more care is needed.

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