The Monetary Authority of Singapore (MAS) has issued a public consultation paper to study the possibility of eliminating all corporate cheques and terminate central cheque clearing by 2025.
The announcement was made by Deputy Prime Minister and Minister for Finance Lawrence Wong in his opening address at the Singapore Fintech Festival 2022.
The initiative, which is part of the government’s efforts to promote digital payments, also aims to help individuals such as senior citizens who still use cheques to switch to other payment methods.
According to the consultation paper, the cheque transaction volume in Singapore has declined with the volume per annum falling almost two-thirds from 61 million in 2016 to less than 24 million in 2021.
The share of cheque transaction volume as a proportion of payments using Fast and Secure Transfers (FAST), Inter-bank GIRO and cheques, has also fallen sharply from 32% in 2016 to only 7% in 2021.
MAS projects that cheque clearing costs per cheque will minimally quintuple to between S$2 and S$6 by 2025 should current trends continue.
“The continued reliance on cheques has resulted in sub-optimal business processes, and contributes to the relatively high cost of payments to the economy. So we aim to eliminate all cheques and terminate central cheque clearing over the medium term,”
said Lawrence Wong, Deputy Prime Minister and Minister for Finance.
