Support for Business Sectors Still Reliant on Cheques to Transit to Digital Payment Methods

Mr Yip Hon Weng asked the Prime Minister (a) whether MAS will work with the business sectors, including property, law and insurance companies, wholesale dealers, brokerages and telcos, with a heavy reliance on cheques for financial transactions to help them achieve a smooth transition to digital payment methods; and (b) in cases where persistent cheque usage is due to statutory or regulatory requirements, whether MAS will work with the relevant Government agencies to explore the possibility of amending these requirements.

The Monetary Authority of Singapore (MAS) announced in July this year that all corporate cheques will be eliminated by end-2025. This comes as cheque volumes have declined sharply in recent years. In contrast, e-payment transaction volumes have grown significantly as both corporate and retail users increasingly use e-payments to transact. The share of the cheque transaction volume as a proportion of payments using Fast and Secure Transfers (FAST), Inter-bank GIRO and cheques has shrunk from 32% in 2016 to only 4% in 2022.

Since 2021, a workgroup led by MAS and the banking industry has actively engaged businesses from industry sectors with high cheque usage, including the property, insurance and legal sectors. The workgroup found that most businesses have already adopted digital payments as they found these channels efficient, convenient and suitable to meet their payment needs. Nevertheless, some businesses asked if an alternative payment solution can be developed to enable them to make deferred payments. To meet this request, the banking industry will implement solutions by 2025, which will allow businesses to make a deferred payment or issue a cashier’s order electronically without the need for paper cheques.

Separately, all Government agencies have reviewed their regulations to ensure that there are no regulatory hurdles preventing businesses and individuals from making payments digitally. This review, which was carried out in 2021, identified a few regulations that had to be amended, including those relating to property conveyancing services and Central Provident Fund (CPF) transactions. These regulations mainly pertain to retail cheque transactions, and the relevant Government agencies will complete the necessary amendments to better facilitate the use of digital payment options. In the meantime, Government agencies and the banking sector will continue to collaborate with the SMEs Go Digital and Seniors Go Digital programmes to help small businesses and individuals use e-payments safely and confidently.