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    Considerations For Transactions Done Using GIRO And eGIRO

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    By on Business

    As payment technologies have been establishing new pedestals for innovation, businesses in Singapore have been gravitating toward leveraging these advancements to streamline their financial processes and enhance overall operational efficiency. GIRO is one of these technological advancements that have transformed the way businesses make and collect payments from their vendors.

    • What is GIRO?

    GIRO is a tripartite payment method that was developed in the year 1984. In simpler words, GIRO involves three participants – your business, your bank, and a billing organization that requests or makes a payment to your organization. Through GIRO, businesses can make or collect funds from vendors directly from their bank accounts. It streamlines accounting and helps maintain positive vendor relationships.

    • What is eGIRO?

    In 2021, e-GIRO, which is a completely electronic form of GIRO, was launched. The ABS made it in collaboration with eight leading banks in Singapore. eGIRO eliminated the need for businesses to rely on paper-based forms when making a GIRO application. The development of eGIRO significantly contributed to making Singapore a smart business hub.

    • Considerations when making payments using GIRO and eGIRO:

    The convenience that GIRO and eGIRO offer is only optimal when you’re mindful of certain things. Let’s understand what the considerations are:

    1. Security and accuracy: GIRO is a robust payment method, and security takes the front seat when discussing it. Generally, eGIRO is more secure than paper-based GIRO, as it utilizes newer technologies to keep data encrypted. However, it’s not just about the security of the two types of GIRO that you must consider. Since GIRO applications are submitted directly to a bank, it’s important to review the security practices that your bank has.

    Furthermore, it’s also important to consider whether the information you’re sharing with the banking portal is accurate. This information could include the recipient’s bank details and the amount that is supposed to be transferred. Any discrepancy and inaccuracy can lead to conflicts or confusion, impeding business operations. Traditional, paper-based GIRO is more susceptible to errors due to manual information input. For more security, it’s better to use eGIRO, where you’ll have to authenticate data before submitting it.

    1. Processing time: Processing time can sometimes be the factor that makes or breaks a deal. eGIRO is incredibly faster than GIRO. While the complete process of making a business payment GIRO can take about three to four weeks, eGIRO can get the same task done in just two days.

    Moreover, the exact duration for a GIRO transfer to occur can differ between banks, so it’s always good to research the turnaround time before opening a business bank account.

    1. Integration with accounting systems: Keeping track of GIRO and eGIRO payments is important for business accounting. If transactions are made using eGIRO, there may be tools available online that can automatically log the transaction details in the company’s account books when a GIRO transaction is made. The tools may track notifications and automatically screen GIRO-related notifications to make an entry in the account book. It’s important to review the security and privacy policy of the tool you’re using before trusting it for recording eGIRO transactions. It can be a better idea to have a script coded in-house for tracking purposes if your business has the resources to do so.

    There are ways to track GIRO payments manually as well. For instance, you can choose to get text notifications and emails for each transaction if your bank offers the service. An alternative could be to manually register GIRO transaction information based on the data retrieved from Internet banking portals.

    1. Fees: Depending on the bank that’s facilitating the GIRO or eGIRO transaction, you may be charged a fee. As of 2023, some banks are letting businesses make eGIRO instructions for free.

    Moreover, there are more charges that you must consider other than the fee for making a GIRO instruction. Some types of fees include cancellation fees, processing fees, and fees charged on every unsuccessful transfer. It’s always good to confirm with your bank what charges they have.

    1. Accessibility: Traditional GIRO requires applications to be filled. These applications may only be available during business hours. On the contrary, eGIRO is available all the time and is carried out completely electronically.

    While eGIRO has many advantages, it’s not going to replace GIRO completely. The reason is that not all businesses that your business partners are comfortable with eGIRO. Some may still prefer traditional paper-based GIRO for their convenience. Thus, it’s good to get accustomed to both GIRO and eGIRO while understanding their upsides and downsides.

    To conclude, there are five main considerations when making or receiving a payment using GIRO or eGIRO. These include security, processing time, tracking through integrations, charges on transactions, and accessibility. Furthermore, it’s also important to note that not all banks may offer eGIRO. The best way to optimize your business for GIRO payments is to explore your options when selecting a bank where you’ll be opening a business account.