Singapore Aims to Phase Out Corporate Cheques by End of 2025by Fintech News Singapore July 31, 2023
All corporate cheques will be phased out in Singapore by the end of 2025 amid the steady decline in use and the rising processing cost as well as growing adoption of e-payments. Individuals will still be able to use cheques for a period after 2025.
The Monetary Authority of Singapore (MAS) will further study the use of cheques by individuals, and develop appropriate initiatives to assist remaining individual cheque users in their transition to alternative payment methods such as PayNow, FAST, GIRO, and MEPS+.
The regulator is also working closely with The Association of Banks in Singapore (ABS), the financial industry and government agencies on a series of initiatives aimed at transiting cheque users to e-payment solutions.
This will include a specific e-payment solution that can serve as an alternative for post-dated cheques for greater convenience to corporates and individuals.
ABS will work with the Domestic Systematically Important Banks (D-SIBs) such as Citibank, DBS Bank, HSBC, Maybank, OCBC Singapore, Standard Chartered Bank and UOB to build an electronic deferred payment (EDP) solution to allow users to make a deferred payment or issue a cashiers’ order, without the need for cheques.
The EDP solution will leverage on existing payments solutions like PayNow and GIRO and be ready by 2025.
Banks will then cease the issuance of new cheque books to all corporates in 2025, after the launch of the EDP solution.
The D-SIBs in Singapore will begin charging for SGD-denominated cheques issued by both corporates and individuals by 1 November 2023, while other banks will do so by 1 July 2024. The charges will be implemented in phases and will vary among banks.