Prime Highlights

• Singapore introduces EDP and EDP+ to replace company cheque clearing with electronic deferred payment channels.
• Cheque issuance to be eliminated by January 2026 and cheque processing by January 2027.

Key Fact

• Singapore corporate cheque clearing volume fell by around 70% between 2016 and 2022.
• Cheque clearing costs, however, quadrupled from 2016 to 2021

Key Background

Singapore is making a giant leap towards a cheque-less corporate payment ecosystem. Two new electronic payment instruments—Electronic Deferred Payment (EDP) and EDP+—have been introduced by the Association of Banks in Singapore (ABS) and Monetary Authority of Singapore (MAS). The instruments intend to wean corporates off the use of cheques by providing safer, real-time, and trackable alternatives.

EDP and EDP+ support different types of deferred payment requirements. In EDP, payments only get deducted when the payee initiates a payment request, hence ideal for invoices and variable payments. Alternatively, with EDP+, it deducts the payment in real-time when directed to do so, with the payee being notified of the transaction and incurring less non-payment risk. Both the above solutions offer high visibility, which improves financial control and reporting for both payee and payer.

The services are provided by seven of Singapore’s major banks to enable frequent business transactions such as paying suppliers, paying rent, and property transfer. The initiative aids the country’s long-term goal for creating a robust and extensive digital payment system made up of FAST, PayNow, GIRO, and MEPS+.

Singaporean banks will stop issuing new corporate cheque books for Singapore dollar from January 1, 2026 and onwards. Cheque clearing on business accounts will be completely phased out on January 1, 2027. The decision was a reaction to the sudden drop in cheque usage over the last few years and the disproportionately unaffordable costs of having the cheque infrastructure. The use of EDP and EDP+ will be seen to expedite the digitalization of B2B payments at a faster rate, providing businesses with improved speed, reliability, and cost benefits in transactions.

Read more : Singapore Central Bank Holds Monetary Policy Steady Amid Easing Trade Tensions