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Common Misconceptions Surrounding GIRO In Singapore

GIRO’s development unveiled a new approach to conducting interbank fund transfers in Singapore, which quickly caught the attention of many businesses. However, this steep rise in popularity was not devoid of misconceptions that kept a few businesses from trying this payment method. That’s what we’ll debunk here.

  • It can’t be used for one-off payments.

While GIRO is mainly advertised as a recurring bill payment method, it can actually be used for one-off payments if required. When setting up a GIRO arrangement, companies are required to enter an expiration date for the authorization. Setting this to a date that is shortly after the first payment may mean that no recurring deductions will be followed. Alternatively, an arrangement can be terminated by directly contacting the bank.

  • An inactive or dormant arrangement terminates automatically.

GIRO works in a highly regulated manner, where official confirmation from the bank account holder is required for both the initiation and termination of an arrangement. When a contract with another business has been declared void, business owners should inform the banks of terminating any payment arrangement specific to the contract. Not doing so may result in deductions and confusion, leading to a negative experience with GIRO overall.

  • There’s a high risk of unauthorized transactions.

GIRO is completely safe to use. GIRO arrangement forms necessitate the approval of both the sender and recipient businesses, so the chances of unauthorized transactions are fairly low. In case they occur, banks are usually responsive to handling such issues.

  • The setup process is very complicated.

Setting up a GIRO arrangement usually requires completing a form. As long as the initiator and billing organization have all the required details handy, GIRO isn’t supposed to be complicated or time-consuming. When clarifications are required, bank representatives usually offer support.

  • In-person bank branch visits are needed for the setup.

That’s quite rare. Initiation requires a form that can easily be found on the billing organization’s website. If it isn’t, the billing organization can be requested to send the form by mail or post. Alternatively, businesses may use the forms available on their bank’s internet banking portals. Visits to the bank for setup are hardly ever required.

  • Only certain major banks offer it.

More than 40 banks presently offer GIRO in Singapore, including those of international origin. However, procedures may vary between banks. For instance,  a credit authorization form may be requested when GIRO payments are not made by an account of banks currently exempt from this requirement.

  • GIRO costs money

GIRO is usually free of cost. Additionally, legitimate banks will usually be upfront about hidden charges, if there are any. The only time an account holder may be liable to pay a fee is when a transaction fails. For instance, some banks may charge up to $10 if a transaction fails due to insufficient funds.

  • It means less control over payments.

It’s rather the opposite. GIRO allows more control since senders are always kept aware of the nature, amount, and time of the deductions. Payment instructions are unlikely to change unless someone from the company manually does so. Bank accounts can also be integrated with tools to track GIRO payments. This could allow better visibility into all GIRO-related operations of a bank account.

  • It offers no advantages over other modes.

GIRO has multifaceted benefits. It’s considered apt for recurring payments, allowing both peace of mind and control for the payer. Secondly, some government organizations accept no payment method other than GIRO, for certain payments like foreign worker levies. That said, there could be many other cases where GIRO would be beneficial over other payment methods.

  • It’s difficult to monitor GIRO payments.

Given GIRO’s automated nature, it’s obvious why businesses may think so. However, monitoring GIRO payments can easily be achieved. This can be done by enabling SMS notifications and maintaining a local ledger using data from the online banking portal or bank statements.

The Bottom Line:

Like most popular things in the world, GIRO is surrounded by misconceptions. Some common misconceptions include that it is expensive, complicated, and risky. Clarifying such misinformation is important to ensure that all businesses can use GIRO without fearing non-existent drawbacks. GIRO can enable greater financial efficiency for businesses of all scales and encourage growth.

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