The Monetary Authority of Singapore has pushed back the deadline for abolition of corporate cheque payments by a year to give businesses more time to familirise themselved with incoming and existing e-payment options.
MAS had previously announced that corporate cheques would be eliminated and that all banks in Singapore would stop issuing new corporate cheque books in 2025. Under the new timeline, banks will stop issuing new cheque books to corporates by 31 December 2025, but the deadline to cease processing of corporate cheques will be extended to 31 December 2026.
There has been increasing adoption of e-payment methods amidst decreasing cheque usage by both corporates and individuals in Singapore. SGD cheque transaction volumes have fallen by approximately 80% from 61 million in 2016 to less than 14 million in 2023. The share of SGD cheque transaction volume as a proportion of payments using Fast and Secure Transfers, Inter-bank Giro, and cheques has decreased from 32% in 2016 to less than 4% in 2023.
The Singapore central bank has set out plans to sunset the current Cheque Truncation System and replace it with a cloud-based system to serve the needs of remaining cheque users. These include users of SGD retail cheques, USD corporate and retail cheques and cashier’s orders.
At the same time, the Association of Banks in Singapore is preparing for the roll out of new Electronic Deferred Payment (EDP) tools in mid-2025 to support the transition to e-payments.
The new tools, dubbed EDP and EDP+, will address the use cases of post-dated payments and transactions requiring greater certainty of payment respectively. Both EDP and EDP+ will be accessible via digital banking platforms, and will leverage PayNow plumbing to allow payers to identify payees conveniently when making payments.
While corproate cheques are being phased out, individuals will be able to continue using paper forms for a period beyond 2025. MAS says that this will provide the remaining retail cheque users that face challenges in adopting e-payment solutions with a longer runway to switch to alternative payment methods.