For businesses operating in Singapore, bank transfers are the lifeblood of commerce. They are the primary method for paying suppliers, receiving B2B payments, and managing payroll. Singapore’s world-class financial infrastructure offers a sophisticated range of transfer options, each designed for a specific purpose.
Understanding the differences between key transfer methods like FAST, GIRO, and PayNow is essential for managing your company’s cash flow, efficiency, and financial operations. While these systems are highly efficient, they can also create a significant operational challenge for a growing business: manual reconciliation.
This guide provides a clear breakdown of the main types of bank transfers in Singapore, their best use cases for businesses, and how to solve the reconciliation challenge they can create.
Key Takeaways
- FAST (Fast and Secure Transfers): The standard for near-instant, 24/7, high-value transfers between Singapore bank accounts — perfect for urgent, one-off payments.
- GIRO: A reliable method for automated, recurring, and bulk payments such as payroll, rent, and utilities — but not instant.
- PayNow: A modern, instant 24/7 transfer solution using simple identifiers like UENs, ideal for both B2C and straightforward B2B transactions.
- The Core Challenge: Using multiple transfer methods leads to reconciliation complexity, as bank statements become difficult to map back to specific customers or invoices.
- The Solution: Modern payment platforms leverage features like Virtual Accounts to automate reconciliation, reduce errors, and save significant time.
The 3 Main Types of Bank Transfers
1. FAST (Fast and Secure Transfers)
FAST is Singapore’s real-time, 24/7 interbank transfer service. It allows you to send and receive funds almost instantly between accounts at participating banks.
- What it is: A high-speed electronic funds transfer service.
- Best Use Case for Businesses:
- Making urgent, one-off payments to suppliers or vendors.
- Paying for high-value items that require immediate settlement.
- Any situation where you need the funds to arrive in the recipient’s account in minutes, not days.
- Limitations: While fast for paying, it’s still a “push” payment. When receiving a FAST transfer, you still need to manually check your bank statement and match the payment to the correct invoice, which can be slow and inefficient.
2. GIRO (General Interbank Recurring Order)
GIRO is the traditional backbone for automated, recurring payments in Singapore. It is a batch-based system processed at set intervals.
- What it is: An automated direct debit and credit system.
- Best Use Case for Businesses:
- Payouts (Direct Credit): Perfect for batch payments made on a regular schedule, such as monthly employee payroll or bulk supplier payments.
- Collections (Direct Debit): Ideal for collecting recurring fees, such as subscription charges, gym memberships, or insurance premiums.
- Limitations: GIRO is not instant; it can take one to three business days to process. Setting up a direct debit mandate has also traditionally required a physical paper form, making customer onboarding slow.
3. PayNow (via UEN or QR Code)
PayNow has revolutionized payments with its convenience and speed. It runs on top of the FAST network, making it instant, but it’s far more user-friendly.
- What it is: An instant, 24/7 transfer service that links a bank account to a simple proxy, such as a mobile number, NRIC, or Unique Entity Number (UEN) for businesses.
- Best Use Case for Businesses:
- Receiving B2B Payments: You can place your UEN on an invoice, allowing clients to pay you instantly without needing your full bank account details.
- E-commerce & Retail: A PayNow QR code at an online checkout or physical point-of-sale provides a fast, cashless way for customers to pay.
- Instant Payouts: Sending instant customer refunds or payouts.
- Limitations: Like FAST, when receiving multiple PayNow transfers to your UEN, you still face the reconciliation challenge of matching each payment to the correct customer or invoice.
The Core Challenge for Businesses: Manual Reconciliation
Here is a common scenario for a growing Singaporean SME:
You check your corporate bank account at the end of the day and see five incoming FAST transfers and ten PayNow transfers to your UEN. The payment descriptions are vague (e.g., “Payment for services,” “INV123,” or just the sender’s company name).
Your finance team must now spend hours:
- Manually cross-referencing the bank statement with your sales records.
- Guessing which payment belongs to which invoice.
- Emailing customers to ask for proof of payment.
- Delaying the fulfillment of orders until payment is confirmed.
This manual process is inefficient, prone to errors, and does not scale as your business grows.
Did You Know?
Singapore launched the FAST network in 2014, making it one of the first countries globally to offer a 24/7/365 real-time payments system.
PayNow was later built on this robust infrastructure to provide an added layer of user-friendly convenience, enabling instant transfers using simple identifiers like mobile numbers and UENs.
How Modern Platforms Automate Reconciliation
This is where a modern payment platform becomes essential. Instead of just receiving payments into one main account, a platform can issue Virtual Accounts.
- How it works: A platform like Razorpay can generate a unique Virtual Account number for each of your customers or even for every single invoice you send. Your customer makes a standard FAST or GIRO transfer to this unique number.
- The Result: The moment the payment arrives, the system knows exactly which customer and which invoice it’s for, and automatically reconciles the payment in your dashboard. This eliminates all manual work, provides instant payment confirmation, and allows you to fulfill orders immediately.
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Conclusion
Bank transfers are the undisputed engine of B2B commerce in Singapore. While FAST, GIRO, and PayNow are all powerful and efficient payment methods, managing the collections from them requires a modern solution. For businesses looking to scale, embracing automation through a payment platform is the key to solving the reconciliation challenge, improving cash flow, and freeing up valuable time to focus on growth.
Frequently Asked Questions (FAQs) for Singapore Businesses
What is the main difference between FAST and GIRO?
FAST is for instant, real-time payments. It’s a “push” transaction you initiate for one-off payments. GIRO is for automated, recurring payments. It’s a “pull” (direct debit) or “push” (direct credit) system that runs in batches and is not instant.
Is PayNow the same as a FAST transfer?
PayNow uses the FAST network to move money in real-time. The difference is the user experience: FAST requires you to enter a bank account number, while PayNow allows you to use a simple alias like a mobile number or UEN.
Which bank transfer method is best for my business?
You need all three for different purposes:
- Use GIRO for regular, predictable payouts like payroll.
- Use FAST for urgent, high-value, one-off supplier payments.
- Use PayNow (via UEN or QR) to receive customer payments easily and quickly.
