Singapore Banks Given Jan. 1 Deadline to Stop Issuing Paper Checks

Singapore’s banking association has debuted an ePayments tool to help businesses transition from paper checks.

EDP and EDP+, announced by The Association of Banks in Singapore (ABS) on Monday (July 28), follows an effort by the country’s financial regulator to phase out corporate checks.

“The EDP solutions address the use cases of deferred payments in place of cheques and complement  Singapore’s existing suite of e-payment solutions, including PayNow, FAST, GIRO and MEPS+,” the ABS said in a news release.

ABS and Singapore’s seven “Domestic Systemically Important Banks” will roll out the solutions progressively to allow for the deferred payments currently made possible by checks. These include things like supplier payments, rental payments and purchasing options for properties.

With the EDP solution, funds are deducted from a payer’s account “only when payee requests payment,” the release added. With EDP+, funds are deducted immediately from the payer’s account, thus making sure the amount cannot be used for other transactions, and reducing the risk of non-payment due to insufficient funds.

Singapore’s banks are set to stop issuing SGD (the Singapore dollar) corporate checks on Jan. 1, 2026. Banks will stop processing those checks starting Jan. 1, 2027.

The Monetary Authority of Singapore has been working to reduce check usage for years, and announced in 2023 a timeline for phasing checks out completely.

The regulator noted at the time that annual check transaction volume had fallen by almost 70% between 2016 and 2022 amid the rising adoption of ePayments, while the cost of clearing a check quadrupled between 2016 and 2021.

This effort mirrors what’s happening in the U.S., where the federal government is working on a plan to eliminate paper checks by Sept. 30 of this year, a move that could potentially save the U.S. Treasury $750 million.

“This transition, driven by an executive order, could accelerate the adoption of real-time payments across government and business,” PYMNTS wrote earlier this year.

Research from the Federal Reserve indicates that businesses and government bodies are the main users of paper checks, accounting for 60% of all paper checks by volume in 2015.

However, businesses are increasingly looking for faster, more flexible payment methods, with a vast majority (81%) saying that instant payments are crucial for supplier relationships, according to PYMNTS Intelligence data.

And consumers are increasingly moving toward instant payments, with a growing percentage of disbursements being received instantly or via same-day ACH.

The post Singapore Banks Given Jan. 1 Deadline to Stop Issuing Paper Checks appeared first on PYMNTS.com.