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INTERSHORES I MAS Will Eliminate Corporate Cheque by 2025

In line with Singapore’s Smart Nation vision where “everyone has access to fast, simple, and secure payments”, MAS (Monetary Authority of Singapore) and ABS (The Association of Banks in Singapore) announced plan in July 2023 to eradicate corporate cheque usage in the city by end of 2025 while it continues to boost e-payment solution.


MAS and the Payment Council proposed a roadmap to terminate the cheque truncation system (CTS) in their consultation paper in November 2022.


Increasing Cheque Cost

The cost of clearing each cheque has significantly increased from SGD0.1 per cheque in 2016 to SGD 0.4 2021 whilst the annual cheque transactions fall at 70% and become 19 million in 2022 from 61 million in 2016.    It is expected that the cheque clearing cost will increase to between SGD 2 to 6 by 2025 if the volumes drop by a further 70%.   Under this, banks will no longer be able to absorb the high cost and will have to reflect the processing cost at bank tariff.


Some banks such as DBS, UOB, OCBC, Maybank and Citi are currently charging the use of SGD-denominated corporate cheques.  Given the rising cost, Singapore Domestic Systematically Important Banks (D-SIBs) such as DBS, UOB and OCBC will start passing the increased costs onto customers commencing from 1 November 2023, charging a fee for individual and corporate cheques.


EDP Solution

To transfer cheque users to e-payment solution, MAS, ABS and the bank industry will develop an electronic deferred payment (EDP) solution together, which will serve as an alternative for post-dated cheques, allowing users to issue a cashiers’ order or make a deferred payment


Under such transition plan, Singapore D-SIBs including DBS, UOB, OCBC, Maybank, Citibank, HSBC, Standard Chartered will develop a EDP solution utilizing existing payment methods such as PayNow and GIRO aiming it operational by 2025.


After the launch of the EDP solution, all banks will cease issuing new chequebooks to corporation in 2025.   For individuals, cheque users can still access to cheques for a certain period beyond 2025.


Transition to E-payments

MAS is planning the second consultation next year setting out proposed timelines and initiatives phasing out individual cheques in transition to alternative payment methods.


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