On 5 December 2024, the Monetary Authority of Singapore (“MAS“) and the Association of Banks in Singapore (“ABS“) announced that two new payment solutions will be launched in mid-2025. Electronic Deferred Payment (“EDP“) will address the use cases of post-dated payments, and EDP+ will cover transactions requiring greater certainty of payment. MAS will also extend the deadline for ceasing the processing of corporate cheques by one year, from 31 December 2025 to 31 December 2026. A summary of the key initiatives and proposals is provided below.
New Payment Solutions
- ABS is working with the Domestic Systemically Important Banks (“D-SIBs“) to build the EDP solution that allows users to make post-dated e-payments. EDP+ will be introduced as a digital alternative to cashier’s orders. The EDP and EDP+ will be launched in mid-2025.
- The EDP and EDP+ leverage existing payments solutions, for instance, PayNow and GIRO. Similar to cheques and cashier’s orders today, EDP/EDP+ are valid for six months from the effective date.
- The main difference between EDP and EDP+ lies in payment certainty. For EDP, funds are deducted upon presentment, whereas EDP+ deducts funds immediately upon issuance.
- EDP is not designed as an electronic cheque or bill of exchange; therefore, the Bills of Exchange Act 1949 will not apply to EDP. If any creditor who receives an EDP for that payment obligation is subsequently informed that the EDP is cancelled or that the bank is unable to pay the specified amount due to insufficient funds in the bank account, the creditor will have recourse to the claim based on the underlying payment obligation.
Phasing Out Corporate Cheques
- All banks will (i) begin ceasing SGD cheque book issuance to corporates from 1 July 2025; and (ii) stop issuing SGD cheque books to corporates and discontinue SGD bulk cheque services by 31 December 2025.
- MAS and the banking industry will extend the processing of corporate cheques for an additional year until 31 December 2026. From 1 January 2027, all banks will no longer accept corporate cheques.
- Cashier’s orders will remain available.
Sunset the current Cheque Truncation System (“CTS”), replacing it with a cost-efficient cloud-based system to serve the needs of remaining cheque users
- As cheque volumes continue to fall with more users moving to digital payments, CTS needs to be fundamentally redesigned. The new fit-for-purpose system for handling the significantly reduced cheque volumes is provisionally known as CTS Lite.
- The CTS Lite is scheduled to be launched in early 2027, and the current CTS will be retired after the CTS Lite is operational. The designation of the current CTS as a Designated Payment System under the Payment Services Act 2019 and Payment and Settlement Systems (Finality and Netting) Act (Chapter 231) will accordingly be revoked with the termination of the system.
- Banks that wish to participate in CTS Lite must fulfil certain technology prerequisites.
Retail cheques, cashier’s orders and USD cheques remain available for corporate and retail customers
- To ensure that the banking needs of senior customers are well met, D-SIBs will continue to waive cheque fees for customers aged 60 years and above as of 31 December 2025.
- Though retail cheques remain available, MAS encourages cheque users to transition to alternative payment methods where possible.
For more information, please refer to the MAS media release titled “MAS and ABS Announce Launch of Electronic Deferred Payment Solutions in Mid-2025 and Extension of Deadline for Cessation of Corporate Cheques“. For more context on these initiatives, please refer to the MAS Consultation Paper on Roadmap to Sunset Corporate Cheques and Transition Plan for Retail Cheques.
Disclaimer
Rajah & Tann Asia is a network of member firms with local legal practices in Cambodia, Indonesia, Lao PDR, Malaysia, Myanmar, the Philippines, Singapore, Thailand and Vietnam. Our Asian network also includes our regional office in China as well as regional desks focused on Brunei, Japan and South Asia. Member firms are independently constituted and regulated in accordance with relevant local requirements.
The contents of this publication are owned by Rajah & Tann Asia together with each of its member firms and are subject to all relevant protection (including but not limited to copyright protection) under the laws of each of the countries where the member firm operates and, through international treaties, other countries. No part of this publication may be reproduced, licensed, sold, published, transmitted, modified, adapted, publicly displayed, broadcast (including storage in any medium by electronic means whether or not transiently for any purpose save as permitted herein) without the prior written permission of Rajah & Tann Asia or its respective member firms.
Please note also that whilst the information in this publication is correct to the best of our knowledge and belief at the time of writing, it is only intended to provide a general guide to the subject matter and should not be treated as legal advice or a substitute for specific professional advice for any particular course of action as such information may not suit your specific business and operational requirements. You should seek legal advice for your specific situation. In addition, the information in this publication does not create any relationship, whether legally binding or otherwise. Rajah & Tann Asia and its member firms do not accept, and fully disclaim, responsibility for any loss or damage which may result from accessing or relying on the information in this publication.
