DBS and IRAS partner to help Singapore be cheque-free by 2025

In line with Singapore’s Smart Nation agenda, DBS Bank is collaborating with the Inland Revenue Authority of Singapore (IRAS) to digitise tax payouts and collections via PayNow. The move is designed to encourage more businesses to go cheque-free. 

IRAS first introduced PayNow as an option for businesses to receive Wage Credit Scheme (WCS) payouts in March, resulting in a 20% reduction in cheque volumes to-date. Before the implementation of PayNow, about half of WCS-eligible businesses chose to receive their payouts via cheques. 

“Implementing PayNow for the disbursement of the scheme’s payouts helps encourage businesses, many of which comprise SMEs, to go chequeless and transition towards digital payments,” said Ang Sor Tjing, director of IRAS’ Revenue and Payment Management Branch. “As part of IRAS’ digitalisation drive, we are also working with DBS to expand the use of PayNow to more services for the convenience of businesses and individuals.” 

“Acceptance of digital transactions among individuals in Singapore has been well established,” said Raof Latiff, group head of Digital, Institutional Banking Group at DBS Bank. “To bring Singapore’s digital agenda to fruition, it is critical to encourage SMEs to get on board the digital payments train as they represent 99% of businesses locally. Partnering with statutory boards like IRAS is one of the key ways to encourage this shift, with them leading the way by digitalising payments and collections channels across their suite of services.”

For the next phase, both parties are working together to leverage DBS’ application programming interfaces (APIs) to digitise IRAS’ stamp duty services. Currently, most taxpayers tend to pay for conveyancing stamp duty via cheques and have to wait several days for the cheque to be cleared before a stamp duty certificate is issued. However, with DBS’ Direct Debit Authorisation (DDA) API, taxpayers can set up a GIRO account online, and make payment for their stamp duty and receive a stamp certificate through IRAS’ e-Stamping Portal instantly. In addition, with a transfer limit of SG$200,000 per transaction, the DBS DDA solution also enables IRAS to digitalise payments for the majority of conveyancing stamp duty transactions. This DDA e-payment option for conveyancing stamp duty will be launched in November.

“Besides stamp duty payments, with cashless payments gaining momentum in Singapore, taxpayers are encouraged to use cashless or electronic payment modes such as GIRO and online banking to fulfil their other tax obligations,” said Ang.

Since PayNow was launched to corporates in August last year, DBS has seen a steady increase in SMEs adopting the digital payment collections solution, with the bank holding close to 40% of the market share by registrations to date. From a transactions perspective, DBS’ corporate clients contribute to more than half of PayNow Corporate receipts in Singapore, with volumes from the bank’s SME customers growing threefold to date. This was mainly driven by the take-up of the bank’s PayNow-integrated QR payment solution, DBS MAX, which led to a doubling in digital payment and collection transactions by SMEs since the solution was launched in November 2018.

“Singapore has continued to show steady progress in the adoption of digital payments on the back of the government’s continuous push to become a Smart Nation,” said Latiff. “However, in order to fulfil Singapore’s ambition to go chequeless by 2025, we need to continue to innovate and explore new ways to help ease businesses, especially SMEs, into the digital future, while providing them the support they need to face the challenges ahead.”