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PayNow extends to businesses from 2018

Move comes as Singapore ramps up its cashless services to bring greater efficiency to this city-state.

From left: Jeremy Gwee, chief operating officer, HSBC Bank Singapore; Judy Hsu, CEO, Standard Chartered Bank Singapore and Asean markets (Malaysia, Vietnam, Thailand and Rep Offices); Piyush Gupta, CEO of DBS Group; Samuel Tsien, Group CEO, OCBC Group; Wee Ee Cheong, deputy chairman & CEO, UOB Group; Amol Gupte, Asean head and Singapore country officer Citi; Lim Hong Tat, CEO Maybank Singapore; Ong-Ang Ai Boon, director, Association of Banks in Singapore.

THE first peer-to-peer fund-transfer service in Singapore is expected to be extended to corporates and businesses in 2018, as Singapore ramps up its cashless services to bring greater efficiency to this city-state, said the Association of Banks in Singapore (ABS).

Since July 10, seven major retail banks in Singapore have offered PayNow, the peer-to-peer transfer service that makes it easy to split the bill or make home-tutor payments using mobile numbers. The round-the-clock service is free. Customers of participating banks - Citibank, DBS, HSBC, Maybank, OCBC Bank, Standard Chartered Bank and UOB - can use PayNow to send and receive Sing-dollar funds.

As early as next year, businesses can link their unique entity numbers to their bank accounts to receive payments via PayNow.

ABS told The Business Times that the government is also exploring the feasibility of using PayNow for disbursements to citizens using their NRIC numbers.

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For customers to receive funds through PayNow, they need to register and link one mobile number with their respective participating banks' accounts. As at Oct 8, 2017, total PayNow registration stood at more than 870,000.

Nineteen banks in Singapore already offer free and 24/7 interbank transfers through Internet banking, running on a system known appropriately as FAST (fast and secure transfers). PayNow runs on this system, allowing the seven banks - which process 90 per cent of the retail transaction volume - to move this fund-transfer service onto mobile devices.

FAST transactions in 2016 totalled 27 million and were worth about S$54 billion.

This PayNow service effectively turns the mobile number into a unique identifier of a banking customer, which is more efficient than using a banking account number as an identifier. Customers can use their NRIC number to link with their banking account.

Before PayNow was launched, a number of banks in Singapore already had some form of mobile peer-to-peer transfer service, but each had its own limitation.

Banks are now expected to integrate the PayNow service into their existing peer-to-peer service, or launch them separately as a new application. Most banks are expected to keep the mobile transaction threshold to about S$1,000 a day.

"This industry-led innovative service has brought about simplicity, as customers can use the existing mobile-banking apps offered by the seven participating banks - there is no need to download a PayNow app," said ABS, which is supporting this year's Singapore FinTech Festival.

The app is also aimed at making payments more convenient. There is no need to remember the account number or bank name of the recipient as long as the recipient has registered with PayNow.

"There is additional security as the sender will see the recipient's name before confirming the funds transfer; this provides added assurance that funds are being transferred to the intended recipient. Customers are also notified via SMS instantly when funds are credited."

Banks are also working to offer PayNow transfers using QR codes. The recipient will generate a unique QR code which specifies the amount to be paid, and the sender scans the QR code to make immediate payment. This comes as the Monetary Authority of Singapore plans to develop a universal QR code payment system for the country soon.