Sunday, July 01, 2018

How to reduce cheque payments

The government has set a goal to reduce cheque payment by 2025. They seem to think that introducing immediate payment using FAST for businesses is the solution.

If this is the case, then our planners are badly mistaken.

Businesses do not need to receive immediate payment. When they receive payment by cheque, they have to wait 1 week or longer for the payment to be mailed and cleared.

The problem is the lack of a standardized facility to make payment.

This is how I envisage a portal operated by the association of banks (ABS) can operate:

a) They payer (individual or business) logs into his bank account
b) He selects a registered payee (a business). Each business need to register only once in the portal.
c) He enters the amount and the invoice number.
d) On submission, the portal will debit the payer and credit the payee and send an email notification to the payee.

I have submitted this suggestion to the Pro Enterprise Panel more than 5 years ago. They did not take it up.

At that time, the FAST facility was not available. But the clearance through GIRO may take a few days to be completed, but the delay is not critical. The ease to the payer and payee is more important. This remains the key challenge.

It does not need 7 years for the portal to be set up, It can be done in six months.

Tan Kin Lian


Anonymous said...

If its not convoluted its not SGP.

Anonymous said...
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