A Comprehensive Guide to GIRO Payments and Transfers in Singapore

What Is a GIRO Payment?

GIRO transfer, often referred to simply as GIRO, is a method of electronic funds transfer that allows your business to make payments or collect payments from your customers or other businesses directly from your bank account. It's a popular method for conducting financial transactions, particularly in countries that support electronic banking systems.

Interbank GIRO (IBG) or GIRO is a 3-way relationship between you, your bank and a billing organisation (BO). GIRO is an arrangement your bank provides for you to make payments directly to a BO for any outstanding bills. A BO can be a government agency or a private company.

*Image Reference: Association of Banks in Singapore

‍The two primary services that GIRO offers for businesses and individuals:

• With GIRO direct debit, you permit a Billing Organization (BO) to withdraw funds from your designated bank account for consistent bill settlements.
• Some banks extend "GIRO-on-demand" facilities, requiring you to authorise each individual GIRO payment either over the phone or through the Internet.

How Does a GIRO Transfer Work?

1. As a business, you start by creating payment instructions for transactions. These instructions outline the recipient's account information, payment amount, and frequency (if recurring).
2. You submit these payment instructions to your originating bank. This bank reviews the instructions and checks factors like your available balance and credit limit (if applicable). For direct credit instructions, your bank ensures you have sufficient funds.
3. If everything checks out, your originating bank sends the payment instructions to the Automated Clearing House (ACH). The ACH acts as an intermediary, coordinating the movement of funds between different banks. The ACH calculates the net settlement amount for each participating bank involved in the transaction. This ensures that funds are accurately distributed among banks. The ACH shares the net settlement figures with the MAS Electronic Payment System (MEPS), which broadcasts the information and handles the final settlement of funds among banks.
4. The ACH forwards the payment instructions to the receiving bank (the recipient's bank). This bank credits the second party's account according to your instructions. 
5. In case of rejection, the receiving bank sends the rejected instruction back to your originating bank via ACH. The ACH adjusts settlement amounts accordingly before forwarding the rejected instruction to your bank.
6. If the payment instruction is successful, the receiving bank confirms the transaction, generating a credit statement for your business and a debit statement for the recipient. The instruction might be rejected if there's an issue (like insufficient funds).

Overall, the GIRO transfer process streamlines payments for your business. It reduces manual intervention, enhances accuracy, and offers a convenient way to manage recurring payments.

What Are the Benefits of a GIRO Transfer?

Here's why GIRO is an excellent option for businesses in Singapore:

• It offers a smooth and efficient way to handle payments between all parties involved.
• Your business can enjoy a streamlined digital payment solution, including the convenience of easily cancelling a GIRO payment if needed.
• Monthly payments become a breeze, freeing you from the task of remembering due dates and eliminating the hassle of dealing with cheques.
• From a banking perspective, GIRO acts as an electronic clearing system, reducing the reliance on manual processes. This helps optimise resource allocation and operational efficiency.
• For billing organisations, GIRO simplifies administrative tasks and manual responsibilities, leading to increased overall efficiency.

*Image Reference: Association of Banks in Singapore

How Can You Monitor Your GIRO Payments?

To effectively track your business's GIRO payments, follow these steps:

1. Bank Statements: Regularly review your business bank statements. GIRO deductions will be clearly listed, showing the recipient organisation's name.
2. Notifications: Explore whether your bank or payment recipients offer email or SMS notifications for GIRO deductions. Enabling these notifications can help you stay updated.
3. Online Business Banking: Log in to your business's online banking account to access transaction histories. This is often a convenient way to monitor GIRO payments.
4. Scheduled Payments: If your bank's online platform provides this feature, you might find a section listing your scheduled payments, including GIRO deductions.
5. Retain Payment Confirmations: Record any payment confirmation emails or receipts you receive from the organisations. These can serve as documentation of your GIRO payments.
6. Maintain Records: Develop a simple tracking system for your regular bills and expected GIRO deductions. This assists in cross-referencing actual deductions against your expectations.

You can manage all your current GIRO arrangements using your bank's Internet Banking services. This platform enables you to establish and control your GIRO setups at your convenience, offering the flexibility to manage them as required.

If you encounter uncertainties regarding specific payments or require more information about a GIRO Singapore deduction, don't hesitate to contact your bank's support or the relevant third-party organisation's customer service.

What Happens When There Are Not Enough Funds in your account for a GIRO Transaction?

• In such instances, Billing Organizations (BOs) might notify you about deductions that didn't go through and provide a potential second deduction date. 
• BOs may ask for different payment methods if needed. 
• BOs can choose to recover bank charges from failed deductions and introduce fees to cover processing costs. 
• Some banks might charge S$10 for each unsuccessful GIRO deduction in Singapore due to insufficient funds. 

For complete information on their fees and charges, contacting your bank and the respective BO is advisable.

How Does a GIRO Transfer Differ From an Instant Transfer?

How Long Does a GIRO Transfer Take in Singapore?

Sometimes GIRO Singapore transfers are processed in groups, making them slower. If you do a transfer on a weekday, it usually goes faster than on weekends or holidays when banks might not work as much. Different banks might also work at their own speeds. Typically, transfers are done in up to two business days, but you may want to ask your bank how long it usually takes for transfers. 

How to Sign Up Your Business For a GIRO Transaction in Singapore?

1. Get the Form: You can usually find the GIRO application form on the organisation's website you want to pay using GIRO. You can also contact them directly if you don't find the form online. And if you want to receive money via GIRO, it would be the same process. 
2. Fill Out the Form: Complete with your business and bank details. For example: If you're applying for GIRO to receive payments into your Aspire Account, you might need to complete a GIRO Credit Authorisation Form. 
3. Submit: Send the filled form back to the organisation. 
4. Wait for Approval: They'll review and approve your application. Generally, your GIRO application should get the green light within 14 working days after you've submitted it, assuming you've correctly filled out the form. The BO in charge will inform you when they'll make the first GIRO deduction.
5. Confirmation: Once approved, they'll notify you and provide details about the first deduction.
6. Ensure Funds: Ensure you have enough funds in your account on the deduction date.
7. Monitor: Keep an eye on your bank statements for deductions.

Remember, at the moment, setting up a GIRO arrangement doesn't come with any fees or charges. Also, Government entities (like Vendors@Gov) might not allow payments to third-party virtual accounts even if you've endorsed the GIRO Singapore DCA form.

eGIRO: Meaning and how it simplifies the GIRO Account Setup Process

With eGIRO, the Association of Banks in Singapore, along with eight leading banks, has built a transformative initiative to achieve Singapore's goal of becoming a smart financial hub. This innovative scheme was launched on 8th November 2021 and presents a novel way to streamline and expedite the application for GIRO payments in Singapore.

These eight participating banks are:

1. Bank of China 
2. DBS Bank/POSB 
3. HSBC Bank
4. Industrial and Commercial Bank of China
5. Maybank
6. OCBC Bank
7. Standard Chartered Bank 
8. UOB

The eGIRO service simplifies the process of setting up GIRO by using cloud technology, microservices, and APIs. This results in a seamless and trouble-free experience for customers, banks, and billing organisations.

The GIRO application process demands 3-4 weeks for completion from start to finish. But now, with the eGIRO process, you'll find that the turnaround time is significantly reduced to just minutes for consumers and less than 48 hours for corporate accounts with designated approvers. This is because eGIRO is available 24/7.

How it works:

1. Choose Your Bank: Start by selecting the bank through which you'd like to process your GIRO payments. This step ensures your payment process aligns with your preferences.
2. Online Banking Login: Access your selected bank's net banking page. Once there, you can easily indicate the specific account you wish to use for vendor payments.
3. Confirmation of Success: After completing the above steps, you'll receive a confirmation that your GIRO application was successful. This assurance gives you the confidence that your payment arrangement is set up as intended.

The benefits of eGIRO

1. Quick Processing Time: Experience rapid transaction processing, ensuring \payments are handled promptly.
2. Faster GIRO Setup: Set up GIRO payments in less time with eGIRO, making the process efficient.
3. Easy and Secure Setup: Enjoy a seamless and highly secure setup process for peace of mind while ensuring your data's safety.
4. Almost Instant Payments: Make payments almost instantly with eGIRO for added convenience and control.
5. Immediate Setup and Confirmation: Set up payments quickly and receive instant confirmation with eGIRO, empowering you in managing your finances.
6. Swift Payments for Billers: Billing organisations using eGIRO can collect payments within a day, ensuring speedy processing for financial transactions.

How Can My Business Terminate a GIRO Arrangement?

GIRO operates as an agreement between your business and its service provider – the Billing Organisation (BO). It streamlines payment processes through your designated business bank account. Within this setup, your business authorises the bank to settle bills, typically regularly, by debiting the account as per the BO's request.

Should you decide to stop a GIRO payment, informing the BO and your business bank is crucial. This ensures that the BO stops requesting payments from your bank, and your bank ceases processing deductions for that specific payment.

Take note that inactive or dormant GIRO authorisations don't terminate automatically. Your business needs to end the GIRO arrangement proactively. This may involve sending a written notice to the BO to communicate the decision and simultaneously notifying the bank of the GIRO authorisation termination. 

Maximising Efficiency with a Multi-Currency Business Account

Think of a multi-currency business account as your complete financial toolbox, designed to make finance management smooth and easy. This account allows you to send, receive, and withdraw funds as needed. Whether you use corporate cards or make transfers through GIRO, your funds are easily accessible. While there might not be a physical branch, reliable customer support is just a click or a call away. 

Additionally, Aspire's multi-currency corporate cards are a smart way for businesses to handle finances. Forget about extra fees with our free local transfers. These cards also offer better currency exchange rates than traditional banks, helping you save money. You can use them to spend in foreign currencies when it's important for your business. Sending money globally is hassle-free, with low transaction fees.

Aspire’s corporate cards also offer 1% cashback on digital marketing and software as a service (SaaS) spending. Enjoy security features like card freezes and customisable limits. Plus, you can create virtual cards for your team at no extra cost.

Apply now for the Aspire multi-currency business account. It's a step forward in managing your finances wisely.