Temporary Waiver of Fees for Customers Above 60 Until End-2025 to Ease Transition to Digital Payments
SINGAPORE: If you’re still using cheques for your bills or purchases, get ready to pay a fee starting November 1. The new fees, which range from S$0.75 to S$3 (US$0.55 to US$2.19), will apply to each Singapore dollar-denominated cheque, according to the websites of seven banks as of Friday, October 20. The affected banks include DBS, UOB, OCBC, Citibank, HSBC, Maybank, and Standard Chartered.
US dollar-denominated cheques will also incur fees, ranging from US$0.55 to US$3. However, these fees will be waived for individual customers aged 60 and above until December 31, 2025, to help them transition to digital payments.
For example, Citibank will charge S$3 per SGD cheque and US$3 per USD cheque, while DBS will charge S$0.75 for SGD cheques and US$1 for USD cheques. HSBC, Maybank, OCBC, and Standard Chartered have similar fee structures, with some variations in the fees for USD cheques.
Rising Costs and Transition to Digital
The move to charge fees for issuing cheques follows announcements made by the Monetary Authority of Singapore (MAS) and the Association of Banks in Singapore (ABS) in July. While corporate cheques have already been subject to fees, this marks the first time individual customers will be charged for cheques.
The rise in cheque-processing costs, which have quadrupled since 2016, is a primary factor for the fee introduction. MAS and ABS reported that the average cost of clearing a cheque reached S$0.40 in 2021, and is expected to increase to between S$2 and S$6 by 2025, should cheque usage decline by another 70%.
Banks have been subsidizing cheque processing costs, but with the expected rise in fees, they can no longer continue this practice. As a result, seven banks will implement these fees, with other banks expected to follow by July 2024.
Impact on Depositors and the Future of Cheques
In addition to the fees for issuing cheques, depositors will also face charges, although most banks have yet to provide details. UOB, Maybank, and DBS have stated that cheque deposits will remain free for at least six months after November 1, as government agencies and organizations shift to alternative payment methods like PayNow.
Customers will be informed if there are changes to cheque deposit fees in the future.
Singapore plans to phase out paper cheques, starting with corporate cheques by the end of 2025. Individuals will still be able to use cheques “for a period” beyond 2025, though MAS and ABS have yet to provide further details. MAS has also indicated that it will conduct a second public consultation next year to explore initiatives to help individuals transition to alternative payment methods, such as PayNow, FAST, and GIRO.
