The End of the Security Cheque? Alternatives for UAE Businesses

What changed for security cheques

For decades, UAE businesses took a signed cheque as the universal guarantee — its power came from the fact that a bounced cheque was a criminal matter. That changed on 2 January 2022: amendments to the Commercial Transactions Law decriminalized cheques bounced for insufficient funds or closed accounts (fraud and bad faith remain criminal). The beneficiary's remedies are now civil — partial payment from the available balance and direct execution — which are real, but slower and weaker as a deterrent. The security cheque in your drawer is no longer the threat it used to be. (General information, not legal advice.)

Why the cheque was always a poor deposit anyway

• It secures nothing until you bank it — then it's a full charge, not a claim.
• Undated or open cheques create legal risk for both sides.
• Physical handling: storage, loss, return logistics at contract end.
• Customers increasingly don't have cheque books at all.

The alternatives, compared

1. Card authorization hold — the direct replacement. Reserved, not charged; released instantly; claimable in part with documentation. The mechanics are in pre-authorization vs charge.
2. Upfront cash deposit. Secure but heavy: real money leaves the customer, and the refund becomes your operational burden.
3. Waiver or insurance products. The customer pays a non-refundable fee instead of a deposit — compared honestly in deposit insurance vs card hold.
4. Bank guarantees. Strong but slow and costly — practical for large B2B contracts, overkill for consumer agreements.

Making the switch

Replacing cheques is mostly a contract-and-process change: amend your agreement to specify a card hold, set the amount by exposure, and adopt a tool that manages the hold lifecycle. Akara gives UAE businesses exactly that — the customer completes a branded request on their phone, the amount is held without being charged, and release or claim is documented end to end. Start with your next contract renewal.