MAS consults on roadmap to sunset corporate cheques and transition plan for retail cheques

18 December 2024

 On 5 December 2024, the Monetary Authority of Singapore (“MAS”) published a consultation paper seeking feedback on planned initiatives to: 

  • manage the timeline for phasing out Singapore Dollar (“SGD”) corporate cheques and the launch of the Electronic Deferred Payment (“EDP”) solution for post-dated payments; and
  • replace the current Cheque Truncation System (“CTS”) with a cloud-based system to serve the needs of remaining cheque users, including users of SGD retail cheques, United States Dollar (“USD”) corporate and retail cheques, and cashier’s orders.

The consultation closes on 17 January 2025.

Corporate cheques

To provide greater convenience to corporates and individuals, the Association of Banks in Singapore (“ABS”), in partnership with the domestic systemically important banks (“D-SIBs”), will be launching the new EDP and EDP+ solutions in mid-2025. EDP is an e-payment solution that is intended to address the use case of a deferred payment (done by way of post-dated cheques today), while EDP+ is a variation of EDP that is intended to provide greater certainty of payment (done by way of cashier’s orders today). Both EDP and EDP+ will be accessible via digital banking platforms and will leverage PayNow to allow payers to identify payees conveniently when making payments via either solution.

The banking industry, with MAS’ support, has been working towards transitioning all customers away from corporate cheques. As part of this process, all banks will begin ceasing SGD cheque book issuance to corporates from 1 July 2025. All banks will stop issuing SGD cheque books to corporates and discontinue SGD bulk cheque services by 31 December 2025. To allow all users more time to transition away from corporate cheques, MAS and the banking industry will extend the processing of corporate cheques for an additional year until
31 December 2026. From 1 January 2027, corporate cheques will no longer be accepted by all banks.

Feedback is sought on:

  • how communication and education efforts may be improved to ensure a smooth transition from cheques to e-payments for both corporates and individuals;
  • specific examples of use cases where businesses intend to use EDP/EDP+, and how banks can facilitate the adoption of EDP/EDP+ to address business challenges; and
  • how corporates intend to leverage on existing legal recourse options to pursue an outstanding claim against a payer for a failed or cancelled EDP payment transaction.

MAS recognises that cashier’s orders continue to be relevant and useful to both corporate and retail payment users. Cashier’s orders will continue to be available after 2026.

Retail cheques

Retail cheques will continue to be available even after SGD corporate cheques are eliminated. To ensure that retail cheques remain available to the public at a reasonable cost, MAS and the industry have designed a new cheque processing system, CTS Lite, which leverages cloud-based infrastructure with more distributed processing to reduce the infrastructure footprint. Under CTS Lite, the cut-off time to deposit SGD and USD cheques is 12pm and funds will be made available for the payee within T+2 business days. CTS Lite is scheduled to be launched in early 2027, and the current CTS will be retired after CTS Lite is operational.

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.

While retail cheques continue to be available, MAS encourages cheque users to transition to alternative payment methods where possible. MAS seeks feedback on how the banking community can further facilitate the adoption of e-payments, particularly in sectors previously reliant on cheques.

USD cheques

MAS observes that the more widely used payment methods for USD transactions continue to be USD cheques and telegraphic transfers (“TT”). However, unlike SGD e-payment transactions like FAST and GIRO, TT remains costly in comparison to USD cheques. Users are unlikely to migrate to TT or other USD payment solutions until these become more attractive than USD cheques in terms of cost and convenience. In the light of these considerations, CTS Lite will continue to process USD cheques issued by corporates and individuals.

MAS seeks suggestions on measures to encourage the adoption of alternatives to USD-denominated cheques.

Reference materials

The following materials are available on the MAS website www.mas.gov.sg: