Anyone who is planning to start a business in Singapore might have heard about GIRO payments. This term may frequently be used in the context of recurring payments, cashless transactions, and more.

But What Exactly Is GIRO?

GIRO stands for General Interbank Recurring Order. GIRO streamlines cashless payments, enabling businesses to manage billing efficiently and consistently for a range of obligations, such as fixed utility bills, subscriptions, and supplier payments — all without the need for frequent manual intervention. In other words, it may help save time because there is an authorized deduction directly from the business account, thus assuring that no deadline is missed.

This payment system simplifies financial management, making handling recurrent payments much easier. So, let’s explore how GIRO works and its benefits in more detail.

How to Enable GIRO?

To enable GIRO in your business, follow the following procedure:

Apply for the Form: In most instances, this is located on the billing organization’s website or can be collected from their offices.

• Fill out the Form: Ensure you have provided all the required business and bank details.
• Return the Form: Return the form to the concerned organization.
• Approval Process: An application is normally processed within 14 working days; you will be notified of the date for the first deduction.
• Check for Deductions: Monitor your bank statements for the scheduled deductions.

How does GIRO Work?

GIRO functions through an automatic electronic payment service that allows businesses to make payments directly out of their bank accounts. Here is how a typical GIRO transfer happens:

• Defining the Payment Instructions: The payer starts by structuring payment instructions, including the account details, the amount to be paid, and the frequency.

• Submission of Instructions: These instructions are then submitted to the bank.

• Processing through the Automated Clearing House (ACH): If all the checks are confirmed, the bank sends the payment instructions to the ACH. This organization helps clear funds from one bank to another and ensures that funds reach their recipients accurately.

• Last Settlement: ACH forwards these payment instructions to the receiving bank, which subsequently credits the respective account according to the instructions provided in the GIRO form.

This process significantly reduces manual interventions, achieves higher accuracy, and is highly convenient for managing recurring payments. Other payment methods offer similar convenience. Let’s explore how they compare to GIRO.

GIRO vs. Instant Transfers:

There are several differences of GIRO vs. instant transfers:

• Processing Time: GIRO transfers usually take a few business days, especially those GIRO payrolls processed in bulk. Instant transfers, on the other hand, take place immediately.

• Operating Hours: GIRO transfers take place only during banking hours, during a working day. Instant transfers can take place at any time.

GIRO vs. FAST 

• Processing Time: GIRO payments typically take one to two business days to process, making them suitable for predictable, recurring payments. FAST transfers, however, are processed instantly, allowing funds to reach the recipient’s account within seconds.

• Cost Efficiency: GIRO transactions often have low or no fees, making them an economical option for regular business payments like payroll and utilities. FAST may incur higher fees, especially for frequent or large transactions.

eGIRO:

In the past two years, eGIRO has improved GIRO’s functionality. It offers a more efficient method for applications, with processing times for corporate accounts typically reduced to under 48 hours.

Advantages of eGIRO:

• Fast Setup: High-speed transmission of transactions.

• Safe Process: eGIRO offers state-of-the-art security whereby your information is safeguarded.

• Instant Confirmation: Your payment arrangement will be confirmed automatically and immediately once set up.

These factors make eGIRO a popular service for businesses interested in making their payment arrangements as efficient as possible.

Termination of a GIRO Arrangement:

If you want to stop a GIRO payment, you must notify the billing organization and your bank to stop further deductions. Be advised that inactive GIRO schemes do not automatically expire, so you must mail a written notice to the concerned parties.

Conclusion:

GIRO is one of Singapore’s accessible and practical ways of managing frequent financial transactions. Knowing how GIRO works, its advantages and even payment tracking can help businesses use this mode to improve their financial operations.

Published by Charlie N.