THE Monetary Authority of Singapore (MAS) will extend the deadline to cease the processing of corporate cheques to the end of 2026.
This comes after the Association of Banks in Singapore (ABS) said it will launch two new payment solutions to support corporate and retail cheque users to transition to e-payments.
“MAS and the banks have assessed that more time should be given to corporates to familiarise themselves with new and existing e-payment modes, as well as for corporates to shift from cheques to the new solutions,” MAS said on Thursday (Dec 5).
In July 2023, MAS said all corporate cheques will be eliminated by end-2025, while individuals will still be able to use cheques for a period after 2025.
In the latest announcement, all banks in Singapore will still stop issuing new corporate cheque books by Dec 31, 2025, but the deadline to cease processing of corporate cheques will be extended by an additional year to Dec 31, 2026.
Meanwhile, retail cheques will continue to be available, along with cashier’s orders and US dollar cheques for both corporate and retail customers.
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Major retail banks in Singapore will also continue to waive cheque service fees for seniors, MAS said.
ABS, with these banks, will launch two new electronic payment solutions in mid-2025, to address the use cases of post-dated payments, as well as transactions requiring greater certainty of payment.
Called Electronic Deferred Payment (EDP) and EDP+, the solutions will be accessible via digital banking platforms, and will leverage PayNow to allow payers to identify payees.
EDP and EDP+ transactions use Giro as the underlying payment rail, and are valid for six months from the effective date, similar to cheques and cashier’s orders today.
The main difference between the two is that for EDP, funds are deducted upon presentment by the payee, while for EDP+, funds are deducted immediately upon issuance.
MAS said the solutions will complement Singapore’s existing suite of e-payment modes, including PayNow, FAST, Giro and MEPS+.
On Thursday, MAS also released a public consultation paper, on the roadmap to sunset corporate cheques and transition retail cheques. The consultation is accepting feedback up till Jan 17, 2025.
In the paper, MAS said it will sunset the current cheque truncation system and replace it with a cost-efficient cloud-based system to serve needs in the medium term – these include users of Singdollar retail cheques, US dollar corporate and retail cheques and cashier’s orders.
MAS noted that the cheque processing system needs to be re-designed as cheque volumes continue to fall with more users moving to digital payments.
MAS projects the volume of cheques for 2024 to be under nine million, down from 13.8 million in 2023. The interbank clearing cost per cheque rose to S$1 in 2024, from S$0.10 in 2016.
