Singapore to phase out checks for businesses by 2025
Also testing digital cash tied to specific purposes – like only letting kids spend allowances on school supplies
Singapore aims to eliminate the use of checks, beginning with corporate checks, by the year 2025. The phase-out was announced by the city-state’s deputy prime minister Lawrence Wong at the Singapore FinTech Festival Wednesday.
Wong described how electronic payments have proliferated in recent years, causing the use of checks as a proportion of payments to fall from 32 percent to seven percent since 2016.
"Think about this: when was the last time you had to write a check? I have not done so in years," said Wong before admitting that he did not even know where his checkbook was – surely a security concern in and of itself.
Wong further stated that reliance on checks had "created suboptimal business processes" and "contributed to a relatively high cost of payments to the economy." Therefore the country was making efforts to eliminate all checks and terminate check clearance in the medium term.
By medium term, Wong meant 2025 – at least when it comes to corporate checks.
To ensure e-payment is inclusive, Wong said the government would provide a "longer runway" for individuals to switch payment methods. He cited seniors as a particularly tech unsavvy cohort that would need more time to make the transition.
"Let's do away with corporate checks first," reiterated Wong.
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Deputy prime minister Wong also outlined another money innovation in progress: the use of purpose-bound Singapore dollars – money that is issued with "specific conditions like when and where these digital monies can be used."
The deputy PM cited the example of allowances parents pay to kids only being usable for meals and school supplies. Wong said the FinTech Festival was serving as a trial for the purpose-bound digi-bucks, with attendees issued digital vouchers to spend at the event, thus providing "immense learning opportunities [to] advance the financial infrastructure in Singapore."
"So this is how we ensure that the financial industry in Singapore stays at the leading edge of FinTech continually experimenting and innovating, creating positive change and solving problems for mankind and the world," Wong concluded. ®