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Warning about Foreign Currency Payments - RSA

  06/21/10 10:52, by Len, Categories: Risk Management, Banking

Source: Article by Neesa Moodley-isaacs

You should be wary of accepting payment for goods and services in foreign currencies. Not accepting such payments will ensure that you avoid fraud and the risk of contravening the laws that govern the exchange of currency, the South African Banking Risk Information Centre (Sabric) says.

Apart from not knowing whether or not the foreign currency is counterfeit, you may find it difficult to exchange it at local banks if you are not legally entitled to accept and exchange foreign currency, Kalyani Pillay, the chief executive of Sabric, says.

"The best thing ordinary members of the public and small businesses can do is to request that all payments for goods and services be made in rands, if cash is the medium of payment," she says.

Despite the various channels that overseas visitors can use to exchange foreign currency while in the country, it will not be unusual to find some visitors who want to make payments with foreign currencies, Pillay says.
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"There is always a temptation to want to be paid in currencies such as dollars and pounds because of their higher exchange values when compared with the local currency, but unless you have been authorised by exchange control, you run the risk of being prosecuted."

Foreign visitors are urged to use only legal channels, such as exchange bureaus at airports, tourist centres and banks, to exchange currency while in the country.

"Visitors should take note that authorities in this country are very strict about any contraventions relating to currency exchanges. We urge them to contact their local embassies for assistance if they do not know where the legal currency exchange centres in South Africa are located," Pillay says.

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