The age of corporate cheques is over? Singapore thinks so

The Monetary Authority of Singapore (MAS) has announced plans to eliminate corporate cheques by the end of 2026, marking a  shift in the nation’s payment landscape as it accelerates its digital transformation.

Under the new roadmap, banks will cease issuing corporate cheque books from December 31, 2025, with a one-year grace period until December 2026 for processing existing corporate cheques. The move comes as Singapore’s cheque usage has plummeted by 80% over seven years, from 61 million in 2016 to less than 14 million in 2023.

To facilitate the transition, MAS and the banking industry will launch the Electronic Deferred Payment (EDP) system by mid-2025. This digital alternative will allow businesses to make post-dated payments through existing infrastructure like GIRO, with an enhanced EDP+ service offering similar security features to cashier’s orders.

The additional year for processing will accommodate businesses that need more time to adapt their financial processes, even though most of the business community has already shifted to e-payments and supports the transition timeline.

Individual customers will still be able to use retail cheques beyond 2026, with the central bank emphasizing its commitment to maintaining accessible payment options. Major retail banks, including DBS, HSBC, Maybank, OCBC, and UOB, will continue to waive cheque fees for customers aged 60 and above as of December 31, 2025.

To support the continued use of retail cheques while managing costs, MAS will replace the current Cheque Truncation System (CTS) with a more efficient cloud-based system dubbed “CTS Lite” in early 2027. The new system will introduce some operational changes, including an earlier daily cut-off time of 12 PM for cheque deposits (compared to the current 3:30 PM) and an additional day for processing.

The shift comes as maintaining the current system has become increasingly expensive. Banking industry projections indicate that interbank cheque clearing costs could surge to over $20 per cheque by 2031, compared to around $1 in 2024.

USD cheques will continue to be available for both corporate and retail users, though usage has declined by 64% from 0.85 million in 2016 to 0.31 million in 2023. MAS noted that while alternatives like telegraphic transfers exist, they remain costlier than USD cheques, making immediate transition challenging.

The central bank is seeking public feedback on these changes through January 17, 2025, particularly on communication strategies and measures to encourage e-payment adoption. The consultation focuses on ensuring a smooth transition for businesses while maintaining accessible payment options for all users.

Several major banks have already confirmed their participation in the new CTS Lite system, demonstrating industry support for the modernization effort. MAS emphasized that the changes align with Singapore’s Smart Nation vision of providing fast, simple, and secure payments for all residents.