Al Etihad Credit Bureau (AECB), a public joint-stock company wholly owned by the UAE Federal Government, has launched ChequeScore, a mobile application that enables both businesses and individuals to instantly know how likely a cheque is issued through a UAE-based bank is to bounce.
Once a user downloads the ChequeScore app to their mobile device and registers, they can scan a cheque, upload a cheque image, or enter the cheque data manually. By completing the purchasing process, the user will immediately be shown the Cheque Score, a score ranging from 1 percent to 99 percent indicating the probability of a cheque to bounce in the next nine months.
The score is also color-coded, with the low probability to bounce colored in green, medium probability to bounce in amber, and high probability to bounce represented in red. The app is available for both iOS and Android devices and can be downloaded from their respective app stores.
The Cheque Score is calculated using the issuer’s Credit Score, another product provided by AECB, with cheque issuance and clearance history, on-time payment patterns, and other factors considered that support the predictive nature of this score.
“ChequeScore will help reduce the number of bounced cheques in the UAE. Last year, bouncing a cheque was a criminal offense; however, with the new law decriminalizing 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. ChequeScore addresses this uncertainty, and not only is the application intuitive, but fast as well, as it will indicate the probability of a cheque to bounce in mere moments.”
As per the UAE Central Bank’s Image Cheque Clearing System (ICCS), there were 21 million cheques issued in the UAE in 2021, with an average value of $13,885 per cheque, with a total value of $11.33 billion not fulfilled as a result of cheques bouncing from individuals and companies.
ChequeScore is expected to help in lowering the number of bounced cheques, and provide a push for financial responsibility as that previous element of criminalization has been removed. 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 behavior history as not doing so would now be showing instantaneously,” Mr. Lutfi added.
While ChequeScore is being made available to the public now, the application went through months of trial testing before launch to ensure a smooth and hassle-free customer experience. During the trial period, more than 11,000 cheques a total value of $214 million were scanned through the application.
“The trial period was valuable for us, as users provided much-needed feedback that was taken into consideration before releasing the final version. It also provided an idea of how receptive businesses were to this product, more than 6,000 users signed up during the trial period which is a very positive indication. In the same period, we have seen cheques as little as $136 and as large as $27 million successfully scored through ChequeScore,” Mr. Lutfi stated.