Thursday, 24 August 2017

Can Singapore catch up in race to go cashless?; Banks in Singapore to use NETS QR code for cashless payments

By Irene Tham, Senior Tech Correspondent, The Straits Times, 24 Aug 2017

In high-tech Singapore, where cashless payment options abound, consumers prefer to fish for physical notes and jiggle coins to pay for goods and services.

Last year, six out of 10 consumer transactions were made in cash here - a huge spanner in the works for Singapore's Smart Nation drive.

In his National Day Rally speech on Sunday, Prime Minister Lee Hsien Loong contrasted Singaporeans' highly connected lifestyle and digital literacy with their unwillingness to go digital when it comes to payment. As such, Singapore lags behind other cities on this front.

Recognising that Singapore has too many different payment schemes and systems that act as impediments, confusing people, he made a call to the industry to "simplify and integrate".

Singapore has to play catch-up with places like China, where everyone in major Chinese cities is scanning a QR code and paying with digital wallets WeChat Pay and Alipay. These digital wallets, linked to the Chinese people's bank accounts, are even accepted at roadside stalls and in taxis. Waiters at restaurants can be tipped in the same cashless way.

Cash may be considered king, but there is a cost to handling it - from the time taken to count it, to storing it securely, and then banking it. Think of the hawker who has to ensure he has cash for change, and needs to take time to count out change for each customer, holding up customers waiting for their food.

Over in India, the government has laid the groundwork for a cashless society following its announcement late last year to demonetise the nation's high-value currency notes. It pushed a national digital funds transfer system, called Bharat Interface for Money, and a biometric identification system, dubbed Aadhaar, to secure transactions. Its goal is to ensure that all Indians, even the rural poor, have access to financial services through digital banking.


In many ways, Singapore is a victim of its own success.

Major banks here - DBS Bank, POSB, OCBC Bank and United Overseas Bank - combined have about 2,000 ATMs islandwide. This means an ATM is within a 500m radius from most people's homes, making cash easily available.

Singapore also lacks the push factors present in China and India.

Indian Prime Minister Narendra Modi's drive to promote a cashless society stems from a political will to eliminate the flow of undeclared "black money" and fake currencies. Electronic money transfers are more traceable and taxable.

Concerns over counterfeit money and the fear of being robbed - not a problem with digital payment systems - drove China's cashless revolution.

In contrast, people in Singapore feel safer with their cash. Also, some had a bad experience with wrong electronic transfer charges and vowed to stay away - at least from its use in certain apps.

Said account manager Kelly Kin, 29, after once having been wrongfully charged by a local ride-hailing app: "I have gone back to using cash in the app ever since."


The biggest incentive for cash use today comes from it being free.

With cash, customers do not have to pay a "convenience fee" - unlike when they use their credit cards. For instance, taxi rides paid with a credit card attract a 10 per cent surcharge.

Even with the Land Transport Authority-owned EZ-Link - which issues the ez-link stored-value cards - its supposedly fuss-free scheme that automatically reloads the value of the ez-link cards comes with a 25-cent "convenience fee" for every transaction. The convenience fee, however, is waived for people who link a DBS/POSB or Citibank credit card to the auto top-up scheme.

Golden Village and Sistic too charge customers at least $1.50 extra for the convenience of buying a show ticket online with e-payment schemes.


Consumers are not the only ones paying a price for going cashless.

A 3 per cent transaction fee is imposed on merchants for accepting Visa and Mastercard payments. The same fee applies when they accept mobile wallets such as Apple Pay, Android Pay, and Samsung Pay - which are layered on the existing credit card infrastructure.

Other online payment options like PayPal and Stripe charge an even higher transaction fee of 3.9 per cent and 3.4 per cent, respectively.

Business owner Lim Jialiang, 27, said: "You will want people to make payment in cash when a 3 per cent transaction fee hurts your margins."

Arguing for more regulatory intervention to cap such fees, Mr Lim, who sells chocolates at the National Design Centre and at pop- up stores, added: "Cash will be king until banks, Visa and Mastercard accept a lower profit margin."

In the European Union, for instance, a rule introduced in December 2015 allows merchants to be charged no more than 0.3 per cent and 0.2 per cent for accepting credit and debit card payments, respectively. And all consumer- facing credit and debit fees, which can be as high as 20 per cent, will be outlawed from next year in the EU.

In Singapore, merchants typically pay about 3 per cent in credit card fees. Even at a large retail chain like Courts Singapore, the cost of accepting cashless payments at its 14 outlets is now about three times higher than the cost of accepting cash, its Singapore chief executive, Mr Ben Tan, told The Straits Times.


The high cost of going cashless is not the only reason why merchants drag their feet over e-payments.

Delay in payment settlements has been a perennial issue for merchants with cash flow concerns.

Singapore's most extensive cashless payment network, dubbed NETS, takes at least a day to settle payments. The 30-year-old system lets consumers insert their ATM cards for direct deductions from their bank accounts.

Interbank Giro, another initiative for direct payment debits from consumers' bank accounts, is also not real-time - requiring at least a day for payments to reach merchants. Credit card transactions too take up to two days to settle.

FAST, a two-year-old online interbank funds transfer system, is the only instant settlement method. But it is "grossly under-utilised", Monetary Authority of Singapore (MAS) managing director Ravi Menon has repeatedly said on several occasions.

Following what The Straits Times understands to be pressure from the MAS, a new instant mobile payment scheme that rides on Fast was launched on July 10. Dubbed PayNow, users need not enter bank account numbers to initiate a transfer on their mobile phone to any bank user.

By year end, a QR code function will also be added to PayNow to allow merchants to accept payments without having to ask customers for their mobile or NRIC number. Customers just need to scan the merchant's QR code to make payments. In his Rally speech, PM Lee said he is looking forward to buying a meal with PayNow at a hawker centre soon.


PayNow with QR code has the potential to be ubiquitous, even among merchants and hawkers, and become the catch-all solution to take Singapore forward.

Its success hinges on the roll-out of a common QR code in Singapore - a work in progress by MAS to unify every payment scheme.

The launch of a common QR code, which PayNow can ride on, is slated for the year-end. Its end goal is for merchants to display just one QR code, which can be scanned by any bank app - DBS PayLah, UOB Mighty and OCBC Pay Anyone - for fuss-free, instant fund transfers.

This initiative could put Singapore ahead of China, where merchants that accept Alipay and WeChat Pay have to display two different QR codes as the two systems do not interoperate.

Regulatory oversight is important for a common QR code in Singapore so that banks, payment networks and e-wallet providers - with conflicting business interests - do not create close-loop systems that can only work with their own apps.

Singapore's payment landscape has suffered from commercial entities dividing and conquering for decades. This gave rise to the problem of merchants accepting one payment option and not another, confusing consumers as a result.

And consider the two most widely used cards, ez-link and CashCard: The former does not work at some carpark gantries, though it is accepted for public transport payments, so motorists still need their CashCards.

Singapore missed the opportunity to go cashless much earlier by standardising the ez-link card as the universal payment card, as Hong Kong did with the Octopus card.

Going forward, Singapore should not let legacy systems and policies hinder its Smart Nation progress.

Challenges SMEs face in going cashless
Cost of adopting e-payments among reasons cash is still preferred by many smaller firms
By Rachael Boon, The Straits Times, 2 Sep 2017

Singapore is making a concerted push to go cashless, but for many small and medium-sized enterprises (SMEs), cash is still king.

Merchants told The Straits Times that adopting e-payments can be costly especially for small players and pointed out that, unlike in other countries, cashless payments have not yet become a part of everyday life here.

The use of e-payments is growing in Singapore, but with the variety of e-payment solutions available, interoperability has become an issue as the systems do not "talk" to one another. This has slowed down the pace of cashless adoption.

In fact, cash remains the primary method for conducting transactions in Singapore, according to a recent study by online payments service provider PayPal. Ninety per cent of the 500 consumers surveyed - compared with the regional average of 88 per cent - still prefer cash as their primary mode of payment.


For merchants, fees charged by credit card companies are a major drawback to adopting cashless payments.

A transaction fee of about 3 per cent is imposed on merchants for accepting Visa and Mastercard payments. Similar fees apply when they accept mobile wallets such as Apple Pay, Android Pay and Samsung Pay - which are layered on the existing credit card infrastructure.

Singapore's most extensive e-payment network, Nets - run by DBS Bank, OCBC Bank and United Overseas Bank - charges merchants a transaction fee of about 1 per cent - and is gaining some traction in the e-front push with a unified point-of-sale terminal. But SMEs - which make up 99 per cent of the businesses in Singapore - are still hesitant.

Mr Lim Jialiang, owner of chocolatier Demochoco that operates online and also has products in some bricks-and-mortar retail stores, points out that credit cards are ubiquitous in Europe and Scandinavian countries as credit card fees are reined in, he said. The European Union, for instance, introduced a rule in December 2015 where merchants cannot be charged more than 0.3 per cent for accepting credit cards, and 0.2 per cent for debit cards.

Even at a large retail chain like Courts Singapore, the cost of accepting cashless payments at its 14 outlets is now about three times higher than the cost of accepting cash, its Singapore chief executive, Mr Ben Tan, previously said.

Mr Mark Lim, who co-owns fashion business Memories, which has seven outlets in neighbourhoods here, said accepting credit cards does not make sense as the company's prices do not justify the costs. His shops sell clothes mostly ranging from $12 to $15, and accessories that can be just a few dollars. "I don't mind using Nets as the fee is less than 1 per cent and it's convenient," he added.

SMEs' cost hurdle

On the other hand, he will accept cashless payments, including credit cards, at his upcoming 4,400 sq ft lifestyle store in Jurong East called Ilahui, targeted at young people.

There are moves being made to remove the cost hurdle for SMEs.

Four government agencies - the National Environment Agency, Housing Board, Monetary Authority of Singapore and the Smart Nation and Digital Government Office - have put out a Request for Information (RFI) to crowdsource ideas on e-payment technology that will work at hawker centres, coffee shops and heartland shops.

The four agencies said the desired solution should include PayNow, an instant fund-transfer system that was launched in July, and should interoperate with international schemes such as Visa and Mastercard. Transaction fees imposed on merchants should also be negligible or standardised.

Mr Anthony Seow, DBS head of cards and unsecured loans, agrees that merchant take-up could be better, adding that the bank has been speaking to merchants to debunk "various myths circulating around digital payments: that high costs are involved in setting up the infrastructure to process payments, it is unsafe, it is complicated to use for both merchant and consumers".

Mr Rahul Shinghal, who is PayPal's general manager of South-east Asia, stresses that "cash has a huge cost for the economy, government, consumer as well as businesses. Singapore spends upwards of $2 billion in managing cash and cheques. Every percentage point increase in cashless payments benefits everybody".


Another issue with existing payments solutions is the fact that transactions can be channelled only through personal bank accounts.

Memories' Mr Lim, a member of the Ang Mo Kio Constituency Merchants Association, noted that institutions like DBS Bank and Alipay have been talking to merchants about using their peer-to-peer (P2P) apps.

Over the past few months, DBS has been encouraging cash-based merchants such as hawker stalls, wet-market vendors and neighbourhood stores to adopt its PayLah QR codes as a payment method.

A DBS spokesman said that as of Wednesday, more than 1,000 merchants have come on board, compared with some 700 in July. Most of them are food stalls at hawker centres and neighbourhood stores.

DBS pointed out that PayLah is currently free for merchants and there is no fee for any PayLah transactions, whether via mobile phone numbers or QR codes.

Memories' Mr Lim said he did consider PayLah but decided against it as transactions go through personal bank accounts instead of corporate accounts.

The DBS spokesman said it is designed for P2P usage but the bank is "working on a corporate solution, to be rolled out in the near future".

Some merchants have given feedback to DBS that since customers do not choose to use PayLah, especially when there are other options such as credit cards or cash, the merchants see no point in signing up for such banking apps.

Tech firm Razer, when asked if these issues will be considered in the proposal for a nationwide e-payment system it is working on, said it had no comment but "will share more information when we are ready".

Singapore's payments council is working on a QR code that can be read by any customer in Singapore, regardless of which banking app he is using, a move that will facilitate e-payments.

Said Demochoco's Mr Lim: "I say this like a broken record but there's a correlation. You need to consider that as a merchant, if I'm facing such fees, it's hard for me to sell using a certain platform and I'll just take myself out of the ecosystem.

"If you're a popular chicken rice stall here, it's unlikely you will care whether you take card or cash."

Cash is king? Not in China
By Lim Yan Liang, China Correspondent, The Straits Times, 22 Aug 2017

A common refrain when I meet fellow Singaporeans in Beijing, such as during recent National Day get-togethers, is how we will manage when we eventually return to Singapore and have to deal with paper money again.

A civil-servant friend recounted how she instinctively reached for her phone to settle her taxi fare on a trip home.

Another shuddered when he thought about having to deal with coins and wet notes of unknown provenance, after having got so used to shopping with his phone at a Sanlitun fresh market.

As for me, the biggest change after moving to Beijing early this year for work is that my wallet has become largely redundant.

Since I opened a local bank account - the key step to going cashless in China - and activated my own Wechat Pay and Alipay accounts, I have been paying for just about everything from meals to groceries to high-speed rail tickets with my phone.

Even shopping online, whether on Taobao or ordering waimai (delivery), the default payment options are these two platforms, and not cash or card.

Indeed, my starkest memory from my first week in China was how much I stood out in queues, fishing for cash and waiting as cashiers who have become unaccustomed to dealing with paper currency did mental maths to work out my change, while those before and after me breezed by with a scan and a beep of QR codes on their mobile phones.

More than once, a vendor would point to his prominently displayed QR codes on seeing me with yuan in hand, and seem almost grudging in accepting my hard currency.

It later dawned on me that no stallholder would want to go back to handling cash, finding the exact change, and dealing with the entire banking and bookkeeping process when all of this can be handled so smoothly, hands-free.

China has now reached a stage where the government has to remind merchants and payment providers that cash is still a valid payment option.

The People's Bank of China (PBOC), or central bank, last week told Alipay's parent company Ant Financial to rein in its "cashless weeks" promotion that encourages merchants to exclusively accept Alipay in exchange for incentives. Such merchants went so far as to refuse cash payments, prompting PBOC to ask Alipay to delete the word "cashless" from its campaign advertisements.

But while the reaction to this news was mostly amusement, it shows how far China has come in becoming a cashless society.

So I totally got Prime Minister Lee Hsien Loong's National Day Rally speech on Sunday, about how Chinese tourists would consider Singapore backward for still doing things the old way.

A common misconception of my friends back home is that payment security is a concern. But Wechat Pay and Alipay can be secured by either a password or fingerprint, which means a stranger with your phone must still have your code - or fingerprint - in order to start buying things with impunity.

Going cashless has other perks. Going Dutch is as easy as opening a split-bill in Wechat, with options for splitting by exact amounts (great for when someone tucks into a three-course meal while another opts for a salad) or splitting evenly.

As for my wallet, now relegated to holding my identity and metro cards and a bit of emergency cash, it no longer inhabits my back pocket but a corner of my work bag. I still carry it every day out of habit, and only because the leather billfold is a birthday gift from my fiancee, but that might soon change.

The Beijing metro was one of the last hold-outs to cashless payments, demanding that passengers use a stored value card to ride. But since June, it has been trialling contactless smartphone payment, and I think I will jump on board soon.

Sorry my love, but cashless beats cash any day.

China's sprint to cashless society well thought out

China's march to a cashless society has been spectacular and relentless (Cash is king? Not in China; Aug 22)

The drivers behind China's progression to a cashless society have not been the government, its central bank or state-owned commercial banks.

Rather, the push came from ambitious and forward-thinking private enterprises, in particular, the Alibaba Group and Tencent, the creators of Alipay and Wechat Pay, respectively.

Alipay was introduced in 2004 to handle payments on Taobao, but it became so successful that other companies outside of the Alibaba ecosystem adopted it to handle their payments.

Subsequently, Alibaba introduced the Yu'e Bao money-market fund, which allowed account holders to earn a higher interest rate on their deposits than their bank account deposit rates.

This move, in turn, drew even more people to set up Alipay accounts.

As for Tencent, the company leveraged on its popular messaging app (Wechat) to introduce its digital payment system.

Besides using their accounts to make payments, Wechat account holders could also store their savings in their accounts to earn better interest rates for their savings than from banks.

China did not evolve into a cashless society just for the sake of becoming cashless.

Innovative and ambitious private enterprises paved the way and lured users through a well-thought-out strategy and by dishing out attractive incentives for people to go cashless.

Chan Yeow Chuan
ST Forum, 24 Aug 2017

Japan: Tech-savvy nation now a laggard
By Walter Sim, Japan Correspondent In Tokyo, The Straits Times, 23 Aug 2017

Blame it on old habits cultivated during years of economic malaise, or a pervasive sense of security given Japan's low crime rates, or simply mistrust in newfangled technology.

Japan, a pioneer in mobile "e-wallet" payments in 2004, has, ironically, since become a serious laggard on this front.

Cashless payments account for just 19 per cent of the nation's overall retail consumption, the Japan Consumer Credit Association has said. The central government wants to increase this to 40 per cent within the next decade.

The reluctance to embrace cashless payments is not unique to Japan. Singapore Prime Minister Lee Hsien Loong on Sunday highlighted this as an area that the Republic is falling behind in in its drive to become a Smart Nation.

Japan, for all its tech savvy, has managed to be concurrently traditional and futuristic. It has clung on dearly to its love for cash, with many still preferring to grapple with wads of bills of 1,000 yen and above, and even one-yen coins.

And yet Apple Pay, Line Pay and Rakuten's Edy are among payment options accepted by businesses such as convenience stores nationwide, along with the contactless rechargeable IC transport card that is akin to Singapore's ez-link card.

By early next year, Chinese e-commerce leader Alibaba will launch in Japan a localised version of its Alipay digital payment system.

And since the bitcoin cryptocurrency was regulated in April, it too has been accepted at electronics giant Bic Camera and budget carrier Peach. Department store chain Marui also announced this month a trial for bitcoin payments.

The Nikkei daily cited the Nomura Research Institute as estimating Japan's digital payment market to be worth 5.6 trillion yen (S$70 billion) this year - a figure eclipsed by China's 15 trillion yuan (S$3 trillion).

China and Kenya were cited as global leaders in the mobile payment movement in a Bank of Japan (BOJ) report in June last year.

Only 6 per cent of respondents of a BOJ survey last November said they made mobile payments, while another 42 per cent said they were aware their smartphones had such functions but did not use them.

Sociologist Emi Kataoka of Komazawa University in Tokyo told The Straits Times: "Japan places a very high value of trust in its cash. Safety measures embedded in its paper bills make counterfeiting difficult."

This trust is absent in the "invisible" mobile payment system, which remains underutilised, given security and privacy concerns.

In June, eight months after Apple Pay was launched in Japan, a Chinese man was charged with fraud after he allegedly used stolen credit card data to pay for 4.45 million yen worth of cigarettes with an iPhone 7S at a Saitama convenience store.

The BOJ said the rate of mobile payment growth in Japan depends on how fast "this feeling of anxiety among people can be dispelled".

Many elderly Japanese still eschew banks with low interest rates in favour of storing their cash under tatami mats at home, Dr Kataoka said. The low crime rate also means many carry wads of cash around without fear, while decades of economic stagnation have led to wariness about payment methods that make it easy for them to overspend.

Also, cashless payment terminals are still unavailable at many mom-and-pop shops and eateries reluctant to fork out money. Such terminals cost 100,000 yen to set up and come with monthly fees.

But Tokyo is looking to help these businesses modernise by offering subsidies, with an eye on the 2020 Olympic Games.

India: Big push to go cashless, but hurdles remain
By Arvind Jayaram, The Straits Times, 23 Aug 2017

When Prime Minister Narendra Modi demonetised India's high-value banknotes late last year in a move to tackle corruption, the severe currency crunch led Indians to embrace mobile-based cashless payment systems in a big way.

Vendors helped to play a significant role in facilitating this mindset change in a country where cash has traditionally been king.

Seeing how their customers did not have enough cash to pay for groceries or even a cup of tea, many vendors switched to mobile-based payment applications.

The private sector was quick to capitalise on the opportunity, with players such as SoftBank-backed Paytm, Mobikwik and FreeCharge launching mobile wallet apps that have attracted a large user base through the promise of rewards and cashback on transactions. Recently, Internet retail giant Amazon joined the bandwagon with the launch of its own wallet app.

The government also responded to the demand for an easier way to transfer funds by floating its own platforms, such as the National Electronic Funds Transfer mechanism, the Bharat Interface for Money and the Unified Payments Interface. It has also rolled out online wallet apps.

Seeking to boost the attractiveness of its own digital payment offerings, the government has also considered higher payouts to users if digital transactions are adopted.

India exhibits strong potential for digital payments and has been categorised as a "breakout" nation in the Digital Evolution Index 2017 released by the Fletcher School at Tufts University and Mastercard.

But there are concerns that the ease of payment will fuel a spending spree by many of India's less financially literate people, resulting in less liquidity as well as less savings for future generations.

There are also concerns over whether India is prepared for digital transactions, due to low information and communications technology penetration, with poor connectivity impeding cashless payment in large swathes of the country.

South Korea: More turning to digital wallets, mobile apps
The Straits Times, 23 Aug 2017

In South Korea, cash is definitely not king as more people switch to using digital wallets and mobile apps to pay for goods or services.

Only about 20 per cent of all payments in the country are made with cash - among the world's lowest, according to the Bank of Korea. The wide range of cashless payment options plays a part.

Tech giants have invested more in mobile payment systems since the government eased financial regulations in 2015, and such payment platforms have become hugely popular.

Samsung Pay, for instance, has hit 10 trillion won (S$12 billion) in accumulated transaction volume in South Korea since it was launched in August 2015, the company said, according to Yonhap News Agency. The app is even pre-installed in newer models of Samsung smartphones.

Toss, another mobile payment app, is also a huge success. It has handled more than US$3 billion (S$4.1 billion) in transactions since its launch in 2015. Meanwhile, mobile payment systems Naver Pay has over 16 million subscribers, and Kakao Pay has 14 million.

Electronic payments gained popularity in South Korea after the introduction of T-money in 2004, as the country sought to streamline public transport payments with a single touch-and-go smart card.

Much like Singapore's ez-link card, T-money is a rechargeable stored-value card with a smart chip for fare deduction. The chip has been modified to fit credit cards, debit cards and even mobile-phone SIM cards - which means people can tap their phones to take the bus.

T-money can also be used at most convenience stores and some retail shops and restaurants.

The Bank of Korea is now aiming for the country to go cashless by 2020, beginning with plans to phase out coins so as to reduce the cost of minting them. It has already cut back on issuing paper money.

The shift towards electronic payments could help boost overall economic growth.

"We can save a lot of cost by not using cash," said researcher Kim Seong Hoon of the Korea Economic Research Institute in an interview with the Financial Times last December. "If we abandon cash, we could see 1.2 per cent extra economic growth a year. A cashless society can help us tackle low growth, low inflation and the low-interest environment."

* Customers of seven major banks here can soon use NETS' QR code system to pay at hawker centres
NETS' code will be compatible with e-wallets of seven major banks; DBS dropping own code
By Irene Tham, Senior Tech Correspondent, The Straits Times, 21 Nov 2017

Pay for a plate of chicken rice by scanning a QR code using your phone? Consumers here will soon be able to do so at hundreds of hawker stalls without having to fuss over which banking app to use or which code to scan.

A single QR code from e-payment stalwart NETS will soon be compatible with the e-wallets of seven major banks covering 90 per cent of retail transactions here - a move that observers say represents the first coming together of all major stakeholders in Singapore's cashless push.

Even Citibank - previously outside the NETS ecosystem - will be coming on board the NETS QR code system.

Still, the biggest change announced yesterday was DBS Bank's decision to ditch its own PayLah QR code system installed at some 1,700 hawker stalls and neighbourhood shops in favour of a common platform.

NETS said its QR code system now works with DBS Bank's e-wallet, as well as e-wallets of OCBC Bank and United Overseas Bank (UOB).

In a separate announcement, an industry taskforce co-led by the Monetary Authority of Singapore (MAS) and Infocomm Media Development Authority released the specifications for a common QR code dubbed SGQR. Its aim is to allow merchants to display just one QR code for scanning by any e-wallet for fuss-free fund transfers.

Singtel's Dash e-wallet is the first to accept the SGQR specification. It is currently accepted at a handful of locations, including Singtel canteens as well as those in Nanyang Technological University, Ngee Ann Polytechnic and Nanyang Polytechnic.

Meanwhile, NETS said it will replace its QR code with a new version that incorporates the SGQR specification in the future.

The announcements by MAS and NETS mark another step towards the unified payment system Prime Minister Lee Hsien Loong called for during the National Day Rally in August, but also reflect the difficulty in unifying Singapore's fragmented system.

NETS' existing QR code system has been rolled out to more than 600 stalls in 20 hawker centres since its introduction in September but then, the system was supported by only two banks. Meanwhile, Alipay expanded its footprint and GrabPay extended its e-payment system to cover selected food outlets.

In theory, the SGQR standard solves all the problems of merchants having to display too many QR codes to accommodate all the payment options selected by consumers - be it e-wallets of banks or those of Singtel and Grab.

"A national inter-operable system like this will accelerate the adoption of digital payments in Singapore and go a long way in supporting the country's Smart Nation payments agenda," said Ms Tan Su Shan, DBS' group head of consumer banking and wealth management.

Ms Tan, who also chairs NETS' board, said the NETS QR code system is able to integrate overseas payment services and international QR code payment schemes.

Compatibility with Citibank, HSBC, Maybank and Standard Chartered Bank is expected to be implemented some time next year.

The Straits Times understands that Citibank will be adding a QR code scanner to its banking app for cashless payments. It is unclear if HSBC, Maybank and Standard Chartered Bank will roll out their own e-wallets or use the NETSPay e-wallet launched last month for making direct debits from banking accounts.

"We feel this is the right time to make the joint push to displace cash in Singapore," said NETS chief executive officer Jeffrey Goh. He added that the plan is to get all 120 hawker centres on board the NETS QR code system by the end of next year - from 20 hawker centres in Beo Crescent, Tanjong Pagar, Yishun Park and Zion Road, and foodcourts and canteens at some polytechnics now.

NETS' merchant fees for hawkers have been waived for three years till 2020; it will cost NETS - owned by DBS, OCBC and UOB - $15 million in infrastructure and maintenance cost during the three years.

Madam Teo Seow Hua, 62, owner of a Nonya kueh stall at Beo Crescent Food Centre, said going cashless has removed the hassle of counting coins. "In the past, I had to make sure I had enough change for customers every day."

By mid-next year, all of NETS' existing 100,000 acceptance points at malls and in taxis will also be QR code-enabled, up from one-third now, including those at Cold Storage and FairPrice supermarkets.

SG QR will ensure maximum choice of payment options

We thank Mr Keith Heah for his feedback on the QR code standard for Singapore (Isn't just one 'standard' QR code system enough?; Nov 23).

SG QR is indeed the "one standard QR code system" that Mr Heah envisages. It will be able to incorporate payment schemes of all current as well as future providers without needing to conform to each of their proprietary specifications.

SG QR will also be able to accept QR payments from international visitors to Singapore and is open to all acquirers.

The acquirer ensures that the merchant receives the payment that the consumer makes through the QR transaction.

SG QR will be progressively rolled out across Singapore next year.

The NETS' QR code allows merchants to display one QR code for consumers to scan for payments via their e-wallets with any of the seven major banks in Singapore.

However, while NETS' QR can be expanded to include other payment schemes, it can only do so with NETS as the acquirer.

While it would have been ideal for all payments providers to use SG QR from the start, doing so would have meant holding back the introduction of QR code payments until the SG QR specifications were ready.

The task force that developed the SG QR standard based it on the global EMVCo specification, which was endorsed by international schemes such as Visa, Mastercard and UnionPay, and finalised only on July 31. The task force then brought in the major issuers of QR payment schemes in Singapore, such as Alipay, EZi Wallet, GrabPay, Liquid Pay, Singtel Dash, UnionPay International and NETS, to develop SG QR.

The Monetary Authority of Singapore and the Infocomm Media Development Authority will be working with payment providers to update their apps prior to the launch of SG QR and ensure a smooth roll-out.

NETS, Singtel Dash and UnionPay International, which launched their QR payments recently, have committed to adopt the SG QR standard when the latter is launched.

With SG QR, consumers and merchants will have a seamless and streamlined e-payment experience, while having maximum choice of payment schemes when making QR payments.

Jerome Lee
Director (Corporate Communications)
Monetary Authority of Singapore

Karen Low (Ms)
Director, Communications and Marketing
Infocomm Media Development Authority
ST Forum, 30 Nov 2017


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