New UAE app lets you know if a cheque is likely to bounce

A new app launched in the UAE on Tuesday allows both businesses and individuals to instantly know if a cheque issued through a UAE-based bank is likely to bounce.

Launched by Al Etihad Credit Bureau (AECB), Marwan Ahmed Lutfi, CEO of AECB, stressed that it has now become highly important that people in the assess the risks when they receive the cheques.

Once users have downloaded and registered, they can scan the cheque image or enter the details manually. The app is available for both iOS and Android devices.

The service will cost Dh10 and a five per cent value-added tax (VAT).

The ChequeScore calculates using the AECB’s Credit Score, another product provided by it, taking into consideration the user’s cheque issuance and clearance history, on-time payment patterns, and other factors that support the predictive nature of this score.

The ChequeScore predicts the likelihood of a cheque to bounce, with a colour-coded system. Green indicates a low probability of a cheque bouncing; amber is medium; while red indicates high probability. It also gives a score ranging from 1 to 99 per cent to indicate the probability of the cheque to bounce in the next nine months.

The UAE Central Bank data showed that 21 million cheques were issued in 2021 with an average value of Dh51,000. Last year, cheques submitted by individuals and companies worth Dh41.6 billion bounced, making up around three to four per cent of the total.

“Once the score is known, the onus is on the receiver’s appetite for risk to accept the cheque. Concurrently, the one providing the cheque should ensure that they have maintained a positive payment behaviour history as not doing so would now be showing instantaneously,” added Lutfi.

The app has been launched to help to lower the number of bounced cheques and provides a push for financial responsibility as that previous element of criminalisation has been removed.

“ChequeScore will help reduce the number of bounced cheques in the UAE. Last year, bouncing a cheque was a criminal offence; however, with the new law decriminalising this at the beginning of this year, it has become imperative that UAE businesses and individuals assess the risks associated with cheques they have on hand,” added Lutfi.

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Prior to the release of the app, a trial run was conducted for more than 11,000 cheques with a total value of Dh788 million where cheques were scanned through the application.

Lutfi said the trial run provided an idea of how receptive businesses were to this product as more than 6,000 users signed up during the trial period. “In the same period, we have seen cheques as little as Dh500 and as large as Dh100 million successfully scored through ChequeScore,” he added.

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