11 Advantages of using a cheque as a means of payment

  • It is less tiresome to write a cheque than counting large sums of money.
  • It ensures accuracy of payment since mistakes made in counting large sums of money are avoided.

  • It is a safe method of payment since it cannot readily be stolen and used by a thief more so when it is specially crossed.
  • It acts as a record of payment since the details of payment are recorded in the counterfoil for future reference.
  • It acts as a proof of payment because when payment has been effected by the bank, it is cancelled to evidence that payment has been done.
  • It is easier to carry a cheque than carrying large sums of bank notes and coins.
  • It can be used to pay many employees at once by using one cheque through credit transfer system.
  • A crossed cheque can be sent safely through the post office compared to cash hence debts can be cleared by posting a crossed cheque to a creditor.

  • It can conveniently be used to effect deferred payments by issuing a post dated cheque to a creditor.
  • It is easier to store a cheque than cash since cheques take a small space.
  • Payments can be stopped where fraud is discovered by the drawer instructing his bank not to pay.


What are the advantages of crossing a cheque?

Crossing a cheque refers to the practice of drawing two parallel lines across the face of the cheque. Crossing a cheque can provide several advantages, primarily aimed at enhancing security and ensuring that the funds are appropriately directed. Here are some advantages of crossing a cheque:

  • Security: Crossing a cheque adds an extra layer of security. The crossed lines act as a deterrent to potential fraudsters by making it difficult to alter the payee or the amount mentioned on the cheque.
  • Payee Restriction: When a cheque is crossed, it becomes “account payee only” or “not negotiable.” This restricts the negotiation of the cheque to the account of the named payee. It helps prevent the cheque from being endorsed to someone else or cashed by an unauthorized individual.
  • Encourages Banking System Usage: Crossing a cheque encourages the use of the banking system instead of cash transactions. By making a cheque crossed, it promotes the practice of depositing the cheque into a bank account rather than encashing it immediately. This helps in tracking the flow of funds and contributes to a more transparent financial system.

  • Clearing Process: Crossed cheques generally undergo the process of cheque clearing, which involves the verification and settlement of funds between banks. This ensures that the payment is made through the proper banking channels, reducing the risk of fraudulent or unauthorized transactions.
  • Bank Account Requirement: Crossed cheques are typically required for payments to be made directly into a bank account. If a crossed cheque is stolen, it is less likely to be misused since it cannot be easily cashed. This reduces the risk associated with lost or stolen cheques.
  • Proof of Payment: Crossed cheques provide a documented proof of payment. When a cheque is crossed and deposited into the payee’s bank account, it creates a record of the transaction, which can be useful for both the payer and the payee for future reference or dispute resolution.


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