S'pore well-placed to adopt and drive payment, fintech innovation

TECHNOLOGY is rapidly changing the financial services industry. The latest is the use of smartphones - instead of credit and debit cards - to make payment in stores. Singapore is one of the first countries in Asia in which both Apple Pay and Samsung Pay have become available, earlier this month. Google also plans to launch its mobile payment solution, Android Pay, in Singapore soon.

Unlike Apple Pay and Samsung Pay, which work only on Apple and Samsung devices, respectively, Android Pay would work on any NFC (near field communications) enabled smartphone running the Android operating system (OS). Between the three, it would ensure that almost all smartphones in Singapore could, potentially, be used to make payment in stores. A recent study by Visa to assess Singaporeans' attitude towards mobile payment showed that around 79 per cent of respondents were likely to pay for goods and services in stores using their mobile phones. This is a logical extension of the fact that Singapore ranks first for smartphone penetration in the world and according to Visa, research has shown that 89 per cent of Singaporeans never leave home without their mobile phones. Contactless payment - the method used to make payments using smartphones - is also very popular in Singapore with the Visa study showing that 40 per cent of Visa credit card transactions in Singapore are contactless. The ballpark figure for the other major credit card issuers would also be in the same region. It is already possible to use mobile phones to pay for rides on MRT, LRT and public buses with the use of a EZ-Link NFC SIM card.

The use of smartphones for credit card payments is one example of how technology is changing consumer habits with banks having to keep up or risk being left behind. Most local banks have rushed to tie up with either Apple and Samsung, or both, to enable smartphone-based mobile transactions. Many banks, such as Citi, are going a step further. They are planning to launch their own mobile wallet payment option.