This article was written in collaboration with OCBC. All views expressed in this article are the independent opinion of DollarsAndSense.sg based on our research. DollarsAndSense.sg is not liable for any financial losses that may arise from any transactions and readers are encouraged to do their own due diligence. You can view our full editorial policy here.
Over the past decade, Singapore has steadily embraced the shift toward a cashless society. Gone are the days when only tech-savvy early adopters used cashless (and even cardless) payment methods.
Today, whether you’re paying with PayNow, a Scan & Pay function on your phone, Apple Pay, Google Pay, or just tapping your credit card via PayWave or PayPass, everyone has their go-to cashless payment method. Even CDC vouchers that many elderly will use to pay for meals at the local coffeeshop count as a type of cashless payment.
For those of us who are old enough, we’ll remember the pioneers of Singapore’s cashless movement – GIRO and NETS. These are the OGs that have paved the way for the digital payment revolution we enjoy today.
What Is GIRO?
Growing up in the 90s, GIRO was a staple in Singapore’s finance scene. However, GIRO isn’t uniquely Singapore.
The term “GIRO” comes from the German word “Giro,” meaning “circle,” and it’s used in various countries to describe systems that automate fund transfers between bank accounts.
In 1984, the Association of Banks in Singapore (ABS), a non-profit organisation representing the interests of the banking community, introduced GIRO. GIRO operates as a tripartite mechanism between billing organizations, customers and their banks. Customers first authorise a GIRO arrangement by completing a GIRO application form, either directly with the billing organisations or through their banks. Once the billing organisations check and confirm the details and the banks approve, the billing organisations can initiate direct debits from the customers’ bank accounts on a regular basis for the payment of bills or services.
For example, I still remember my mom explaining to me how her GIRO farecard would magically top up when it was running low or how my school fees and other household bills were all automatically paid via GIRO every month. In a world where cash was king, GIRO seemed like a magical solution that automatically handled our bill payments even though I knew the money was debited from my parents’ savings accounts.
GIRO is still frequently used today on regular expenses like childcare fee and to pay property tax
How GIRO Evolved In Singapore
GIRO offers benefits for all parties involved. For billing organisations, it reduces administrative work. For customers, it’s convenient as they no longer have to worry about remembering bill payment dates or writing cheques, which was the alternative back then. Banks also benefit as they can reduce paperwork and manual processing.
GIRO has come a long way over the years.
For example, through Internet banking or mobile banking apps today, we can easily apply GIRO service to pay bills that we have, such as telecommunication, utilities, S&CC fees from the town council and many more.
Setting up and terminating these GIRO services is easy and can be done entirely through internet banking or on your mobile banking app.
In 2021, the digital version, eGIRO, was introduced. eGIRO, or electronic GIRO, digitises the traditional paper-based GIRO application process, cutting down the processing time from up to four weeks to just a few minutes. This upgrade not only speeds up the setup but also significantly reduces the need for manual processing and paperwork.
Read Also: 6 Things You Should Know And Consider Before Setting Up A GIRO Arrangement
The History Of NETS
NETS was first formed by a consortium of five local banks: DBS, OCBC, UOB, OUB (now part of UOB), and POSB (now part of DBS). Today, NETS is a private limited company equally owned by the three local banks: DBS, OCBC, and UOB.
NETS, which is short for Network for Electronic Transfers (NETS), is an electronic payment service provider started in 1985 to spearhead the nationwide implementation of Electronic Funds Transfer at Point-Of-Sale (EFTPOS) in Singapore.
The NETS debit scheme, which many of our families used in the 90s and 2000s, was initially a two-month pilot project in June 1985, involving 10,000 ATM cardholders from Singapore banks and 64 terminals at government offices, supermarkets, department stores, and petrol stations. The trial was later expanded to include 100,000 cardholders. NETS debit allowed ATM cardholders to use their ATM cards and PINs to pay for purchases at retail shops, eliminating the need to pay using cash. This was a significant innovation then, especially since the ATM itself was relatively new.
The NETS payment scheme was officially launched island-wide in January 1986. It allows about 1.3 million ATM cardholders to make transactions through 195 NETS terminals at 84 retail outlets, including departmental stores, supermarkets, petrol stations, government departments, and restaurants.
The initiative was a hit, and by 1993, consumer spending through NETS exceeded S$1 billion.
How NETS Has Evolved
Over the years, NETS has continued to evolve and innovate, becoming an integral part of Singapore’s cashless payment system.
Innovations include NETS FlashPay, a stored-value card that many of us use for transport and parking payments, and NETS QR, a QR code-based payment solution that allows customers to pay by scanning a QR code with their mobile devices.
NETS continues to be well integrated into the Singapore digital banking ecosystem. For example, many retail shops and hawker stalls today will display the SGQR label, which also includes the NETS QR icon. This indicates that the merchant can receive digital payments through different payment methods, including those offered by banking apps.
Consumers can easily pay through NETS using bank apps such as OCBC Digital. On the OCBC Digital app, you can access Scan & Pay to pay via NETS payment. In addition to NETS QR, OCBC Digital also supports other payment methods such as UnionPay and Alipay+, which can be used in and outside Singapore.
Scan & Pay allows us to access different payment methods
As we look back on the heritage of GIRO and NETS, it’s clear that these systems laid the groundwork for the cashless convenience we now take for granted.
In a world where you can pay for your kopi with a QR code or breeze through MRT gantries with a tap, it’s easy to forget the trailblazers who started it all. GIRO and NETS are the original “OGs” of our cashless landscape. Their heritage is not just a part of our financial history but also a cornerstone of our current digital economy. They not only change how we pay but also set the stage for the digital payment revolution, a heritage that continues to shape our modern, cashless society.
Read the other articles in our heritage series.
Our Heritage: The Evolution Of Bank Branches In Singapore
The post Our Heritage: The History Of GIRO & NETS, The Pioneers Of Cashless Payment Systems In Singapore appeared first on DollarsAndSense.sg.
