Accelerating drive towards cashless society in Singapore – A snapshot of recent initiatives
Recent initiatives include the launch of PayNow, which links mobile numbers to bank accounts and unified point-of-sale terminals at retailers and the establishment of the Payments Council.
Above image: PM Lee Hsien Loong delivering the National Day Rally speech on 20 August 2017 at the Institute of Technical Education College Central/ Credit: Prime Minister’s Office, Singapore
In this year’s National Day Rally Speech in Singapore, one of the key themes of Prime Minister Lee Hsien Loong’s speech was the ongoing Smart Nation initiative. Within Smart Nation, achieving a cashless economy is one of the current focus areas.
PM Lee spoke about how China has gone the furthest with e-payments, so much so that even roadside hawkers are accepting mobile payments.
He said, “Indeed, in major Chinese cities, cash has become obsolete. Even debit and credit cards are becoming rare. Everyone is using WeChat Pay or AliPay and these apps are linked to your bank account. To pay someone money, just pick up the phone, scan his QR Code. And you can use these apps for nearly all payments.”
But in Singapore 6 in 10 transactions are still cash or cheques. The PM said that though there are e-payments available, there are too many different schemes and systems that do not talk to one another. People have to carry multiple cards, and businesses have to install multiple readers, which is inconvenient for consumers and costly for businesses. So, the systems must be simplified and integrated.
Here, OpenGov looks at the multiple related initiatives launched in Singapore over the past few months, as the city-state goes into overdrive to realise the vision of a cashless economy.
The Monetary Authority of Singapore (MAS) announced the establishment of a Payments Council, comprising 20 leaders from banks, payment service providers, businesses, and trade associations. The Payments Council aims to formally bring together both the providers and users of payment services in Singapore. It is expected to encourage collaboration within the payments industry, promote interoperability among e-payments solutions, develop strategies to drive the pervasive adoption of e-payments, and advise and make recommendations to MAS on payments related policies. It is part of a series of initiatives by MAS towards realising the vision of an e-payments society in Singapore.
In July, the Association of Banks in Singapore (ABS) launched a new peer-to-peer funds transfer service called PayNow, which links mobile numbers to bank accounts (Singapore National Registration Identity Card/ Foreign Identification Number can also be used).
PayNow enables users to pay and receive money using their mobile banking app, without any need to know bank names or account numbers. As PM Lee described it, “You can pay money to somebody’s mobile number, if he is on PayNow. And if you are on PayNow, other people can pay you just using your mobile number.”
Once the mobile number is linked to PayNow, customers of the seven participating banks can send and receive Singapore Dollar funds from one bank to another through FAST (Fast and Secure Transfers), almost instantly.
The QR code payment method, which is convenient, safe and does not have a credit card fee, will soon be made available for PayNow, which will facilitate payments at retail outlets, such as hawker centres.
(Update: The National Environment Agency (NEA), Housing & Development Board (HDB), Monetary Authority of Singapore (MAS) and Smart Nation and Digital Government Office (SNDGO) jointly issued a Request for Information for electronic payment (e-payment) solutions to support micro-payments at hawker centres and other small shops on August 25. In view of the low-value transactions in these places, the solution must be affordable for the merchants, for payments between them and their customers and between them and their suppliers.)
Unified Point-of-Sale terminals
The MAS was working on developing an Unified Point-of-Sale (UPOS) terminal that would allow a merchant to accept all major card brands, including those that are contactless or embedded in smartphones.
In May, it was revealed in a joint media release that Dairy Farm Singapore Group (DFSG), in partnership with Network for Electronic Transfers (NETS) and United Overseas Bank (UOB) will be installing 2,000 Unified POS payment terminals over 650 stores in 2017. DFSG will implement these Unified POS terminals across its Cold Storage, Market Place, Jasons, Giant, 7-Eleven and Guardian Health and Beauty stores. The Unified POS system supports a comprehensive range of payment modes – NETS, NETS FlashPay, Apple Pay, Android Pay, Samsung Pay, UOB Mighty Pay, EZ-Link in addition to credit and debit cards.
Convenience store chain, Cheers, opened its first unmanned store at Nanyang Polytechnic in July, featuring self-checkout counters with a unified cashless payment system, among a variety of retail technologies being used in the pilot store.
In May, Today newspaper reported that the MAS and other agencies are working on to achieve a government aim for half the food and beverage (F&B) establishments to adopt digital services by 2020.
Cashless public transport
The Land Transport Authority (LTA) of Singapore and TransitLink, a subsidiary of LTA, announced in a joint press release earlier this month that they are working towards a fully cashless vision for public transport by 2020. Steps being taken include extending the ongoing Account-Based Ticketing pilot, wherein commuters holding Singapore-issued Mastercard contactless credit or debit cards can simply tap theircard on the bus or MRT fare readers and they are charged for their rides in their credit or debit card bill.
Since January this year, the option of topping up stored-value cards using personal bank cards, as well as mobile payment platforms like Apple Pay and Android Pay, has been added to all General Ticketing Machines (GTMs) at all train stations. As a result, cashless top-up transactions via GTMs have increased by more than 70 per cent over the first six months.
LTA and TransitLink are working with rail operators to remove cash top-up services at Passenger Service Centres (PSCs). To minimise inconvenience for commuters, this process will be carried out gradually, starting with PSCs at 11 train stations from September 1, 2017. Over the next few years, LTA and TransitLink plan to progressively remove cash payment options for public transport transactions, including for fare payment on buses and for stored-value card services at train stations.
Some of the steps taken by local banks
DBS introduced QR code payments on its mobile wallet, PayLah!, which has around 500,000 users in April, while OCBC Bank launched its first standalone mobile payments app, Pay Anyone, which makes QR code cashless payments available at close to 2,500 NETS terminals in May. In July OCBC announced that its Pay Anyone app no longer requires even mobile or NRIC numbers. PayNow-registered customers can create and send personalised QR codes to other OCBC Pay Anyone users via social networking apps or email when requesting payment.
DBS announced in May that it would recruit up to 1000 ambassadors for its Smart Nation Ambassador Programme (SNAP) who would travel island-wide to encourage small cash-based merchants, such as hawker centres, to adopt the QR code option as a payment method.
Just last week, POSB launched the Smart Buddy Programme, which uses wearable tech (a free watch) to teach students how to save and spend wisely by helping them track their savings and spending habits digitally. Since the programme’s pilot a year ago, some 6,000 free POSB Smart Buddy watches have been issued to students. The watch helps children take an early step towards digital payments and also monitors their activity levels. Parents can in turn remotely pre-set their child’s daily allowance, send them emergency money, and monitor their kids’ spending, savings, eating habits and activity levels – all with an accompanying app.
 Citibank Singapore Limited, DBS Bank/POSB, HSBC, Maybank, OCBC Bank, Standard Chartered Bank, and United Overseas Bank.