What Is eGIRO, And How Businesses Can Use It For Even Faster Payment Collections From Customers

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Every bill payment transaction usually involves a minimum of three parties: 1) the customer who pays the bill, 2) the bank that collects the payment, and 3) the billing organisation that wants to get paid.

In financially-savvy Singapore, there are many ways for a business to collect payments. One of the most common ways that all of us are familiar with is GIRO.

Introduced in 1984, GIRO has become a favoured payment method for businesses in Singapore to collect recurring bills from their customers. However, setting up such an arrangement can be a manually intensive and time-consuming process – in need of some modernising.

During the Singapore Fintech Festival in November 2021, eGIRO, its digitalised cousin, was introduced. Deputy Prime Minister Heng Swee Keat went on to “encourage more organisations to be part of eGIRO”, beyond the initial 13 billing organisations offering it.

Read Also: Guide To Payment Solutions You Need To Offer Your Customers In Singapore

What Is eGIRO In Singapore?

eGIRO, or electronic GIRO, digitalises the current paper-based GIRO application process. This reduces GIRO application processing time from up to four weeks to a few minutes, as well as reduces manpower and paperwork required for manual processing.

GIRO (and eGIRO) can be used for both retail customers (via all participating banks) and corporate customers (with some participating banks).

eGIRO is an initiative by the Association of Banks in Singapore (ABS), along with eight major banks including OCBC Bank, and supported by the Monetary Authority of Singapore (MAS).

Bringing GIRO’s Paper-Based Application Process Into The Digital-Age

While there’s nothing wrong with GIRO as a payment system, the main issue lies in its current paper-based application process. Any business that wants to collect regular GIRO payments from their customers must go through a tedious and resource-intensive setting-up process that takes up to four weeks and involves snail mail hand-offs to multiple parties.

Customers have to complete the GIRO application forms that require manual inputs for information they may not have on-hand and wet-ink signatures. This also means billing organisations either have to send them the form or get them to download and print it off their websites.

These forms are then routed through the billing organisations (the companies that want to collect recurring payments from customers) for verification before being sent to the customers’ banks for approval. Confirmation is again routed the same way back – to the billing organisations, which have to notify their customers.

This unnecessarily extends the application time and adds inefficient layers to the verification process, which can also result in human errors and delays. With eGIRO, the existing set-up process has been enhanced with a digital makeover.

How eGIRO Helps Businesses With A Smarter Solution For Customers (And Themselves)

eGIRO brings the existing payment collection solution into the digital age. This benefits businesses that have a need to collect payments, customers who need to pay and the overall ecosystem.

For billing organisations, the main benefits are:

#1 Streamlining The GIRO Application Process

Via a self-service platform, customers can now access your website or mobile app to apply for the eGIRO option – which will launch any of their preferred bank’s Internet Banking page. Customers can then select their bank account and digitally authorise their GIRO setup.

As your customers can now access their preferred bank through a single API connectivity, you no longer need to liaise with multiple banks to process your GIRO applications. Furthermore, you also get end-to-end visibility of your customer’s eGIRO application.

#2 Greater Efficiency and Faster Turnaround Time

With eGIRO, the entire application process becomes more efficient as there is no longer a need for manpower, handling paper-based applications, and multiple physical-copy form hand-offs with customers and their respective banks.

A direct application through customers’ internet banking accounts also means human error, such as customer signatures not matching or inputting incorrect bank account details, is avoided.

This cuts the turnaround time for each eGIRO application to as quickly as a few minutes, from about four weeks in the past, with a confirmation automatically sent to customers when their eGIRO application is successful.

#3 Collect Payments Faster and More Cost-Effectively from Customers

A more efficient and faster application process also leads to more timely payments from your customers. This improves your cash flow.

eGIRO is also a cheaper collection solution, compared to other forms of card collections. eGIRO, can also help alleviate administrative efforts (and costs) on tracking your accounts receivables. This will likely lead to a reduction in missed payments from customers.

#4 Extending New GIRO Use-Cases

While GIRO payments are usually associated with collecting recurring payments from your customers, it can also be used for ad-hoc payments. This may not have been useful in the past due to the long application lead time. With near-instant approvals, eGIRO enables new use cases for e-commerce marketplaces, e-wallet top-ups, instant digital collections and BNPL instalment plans.

Similarly, customers also benefit from the improved eGIRO payment solution:

#1 Better Payment Experience

Given that we are living in an increasingly digital world, such a quick, simple, online application would substantially improve retail and/or corporate customers’ payment experience.

With eGIRO, customers can apply for eGIRO 24/7 at their convenience and there is no need for any paperwork or physical runs to the letterbox.

#2 No Need to Arrange for Ad-Hoc Payments While Waiting For Approval

In the past, a longer lead time also meant that customers had to continue making payments with cheques, credit cards, debit cards or other methods while their GIRO application was being processed. Not keeping up with payments (i.e. simply waiting till the GIRO application was processed) may have piled on stress, and not to mention, potential late fee charges. With eGIRO, this is no longer the case, with approvals processed in as quickly as a few minutes.

#3 Reduction of Carbon Footprint

Another benefit that eGIRO brings to the whole ecosystem is a collective reduction of carbon footprint. Traditional GIRO applications require mails to be sent out, postage costs and manual paperwork.

eGIRO stamps out all this waste – saving up to two million sheets of paper annually and better utilisation of manpower and resources in Singapore.

Use eGIRO To Start Collecting Your Customer Payments

eGIRO can be applied to a wide range of sectors. When eGIRO was launched in November 2021, 13 pilot billing organisations went live with the service, including government agencies, e-wallet providers, insurance providers, financial services platforms, and credit card issuers.

With eGIRO, newer use-cases for e-commerce marketplaces that are offering e-Wallet top-ups and Buy-Now-Pay-Later (BNPL) instalment plans can also benefit. eGIRO enables a comparably convenient digital collection solution without the fees that businesses have to incur when accepting credit and debit cards.

As mentioned at the start, our government is also encouraging more billing organisations to embark on eGIRO as a payment method for their customers. It doesn’t matter if you are using it for its typical use-cases for recurring payments from telcos, utilities and credit card companies or have more modern collection needs such as enabling your customers to top up their e-wallets or make BNPL payments, eGIRO can be an efficient and cost-effective option.

All you need is a corporate bank account, as well as a customer-facing website or mobile app (and the technical resource to build APIs) to become a billing organisation offering eGIRO.

As a billing organisation, you need to direct your eGIRO collections to your bank account. OCBC enables you to do this via OCBC eGIRO. You can let the OCBC customer management team guide you through the process of setting up eGIRO applications for your customers.

If, on the other hand, you are the customer rather than the billing organisation, you can also check with your billing organisation if you can make an eGIRO application for your payments.

Read Also: Guide To Opening A Business Account For Your Start-Up In Singapore

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