“The use of the ACH is a far better option compared to post dated cheques and also provides an electronic audit trail that will ensure that there are no disputes over monies paid or unpaid,” the Chief Executive of Ghana Interbank Payment and Settlement Systems (GhIPSS) Mr. Fred France, told journalists in Accra.
The ACH is an electronic payment system similar to standing orders. It enables a client to instruct his or her bankers to make regular or recurring payments on his or her behalf at a determined date.
This implies that, anyone who signs onto a mortgage facility can ask the bankers to make the installment payments to the mortgage finance company.
Mr. France noted the increasing interest in mortgage financing and said the use of ACH to finance such facilities would not only create convenience to the person taking on the mortgage but also the mortgage company.
Mr. France explained that the ACH provides a lot of flexibility, makes payment quicker and also provides security of the transaction.
He asked mortgage houses to join GhIPSS in propagating the good news about the use of ACH for such recurring payments.
He urged mortgage companies who are still not conversant with the uses and benefits of ACH to contact their bankers or come over to GhIPSS,” he said.
Currently, a number of mortgage finance companies accept post dated cheques from their customers as a form of payment. However, this form of payment implies that the mortgage company must each time sort out its pile of cheques to determine which ones are due to be presented to the banks.
They also would have to contend with mistakes on cheques which are eventually rejected by the banks.
There are also challenges reconciling the cheques received and what is entered into the books of the company, and the contentions sometimes coming from the customer.
Mr. France said with ACH, all these problems are eliminated because payment through the system is electronic and also generates electronic receipt that can be verified in the event of disputes.
He said intensive public education by mortgage finance companies through fairs, exhibitions and seminars, to create a greater awareness about mortgage as a finance option for the purchase of property was paying off.
This awareness has increased the number of people who are now opting for it, he said, and as people’s incomes increase, it is strongly anticipated that the demand for mortgage will shoot up.
“With such projected high numbers, it will become very problematic if mortgage finance houses continue to depend heavily on postdated cheques.”**