Tuesday, December 18, 2012

Time to do away with checks

Many consumers can pay regular bills to a few large companies, such as utility companies, using GIRO, AXS, SAM or similar channels.

However, they are not able to use these channels to make once-off payments to small companies. These payments have to be made by check. Small business also use checks for their payments.

I suggest the following changes be made to allow more payments to be made using electronic means to replace the use of checks:

a) allow payments to be made by quoting the bank account number and for the name of the receiving party to be displayed for confirmation
b) allow the payer to enter a number, e.g. the invoice number or customer number, to identify the payment, and for the identity of the payer to be shown to the receiving party
c) allow the receiving party to download details of these payments easily and on demand.

These changes may require some of the existing regulations of the Monetary Authority of Singapore to be changed, e.g. to disclose the name of the other party in the transaction. 

Most banks should be able to implement these changes to their existing systems quite easily and at a low cost. It will encourage more consumers and small business to use use electronic payments, instead of checks.

Do you agree?

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