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Many recipes but Singapore's cashless appetite still not sated

Observers say that, rather than having so many e-payment players, it is far better to shoot for interoperability of these systems

Paying for lunch at Tanjong Pagar Plaza Market and Cooked Food Centre by scanning the QR code. The stallholders' association there has teamed up with Nets to enable cashless payments at all 47 stalls.


TOO many cooks are spoiling the broth in Singapore's pursuit of a cashless society. Competition among e-payment players will improve user experience, certainly, but Singapore does not need another new e-wallet; it needs a standardised Quick Response (QR) code or Point-of-Sale (POS) terminal, observers tell The Business Times.

Anna Haotanto, chief executive of The New Savvy, an online financial guide for women, said there are now too many e-payment solutions in the market. With DBS PayLah!, GrabPay and Liquid Pay already in the arena, new kids on the block NetsPay and RazerPay made their foray in the last month.

Jeremy Tan, chief executive officer of mobile-payments company Liquid Group, added that Singapore has only scratched the surface of the e-payments market. "We can expect more players to enter the digital payments sector."

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But Ms Haotanto said Singapore's focus should not be on encouraging competition through new e-payment schemes. "We should focus on integrating and deploying more POS terminals, having a universal QR code, and convincing merchants to adopt the new technologies by offering monetary incentives or rebates."

Mr Tan said that the crucial first step - since taken - is the development of a QR code for Singapore, dubbed SGQR, which will enable merchants to display just one QR code at their stalls for scanning by any e-payment app. He also recommended a standardised e-payment platform.

SGQR, co-led by the Monetary Authority of Singapore (MAS) and Info-communications Media Development Authority, will be launched by the end of the year.

Mr Tan said that the next step for Singapore, if it is to remain relevant in the global digital-payments sector, is to open up PayNow, which is Singapore's first bank-agnostic, peer-to-peer (P2P) fund-transfer service supported by six banks here.

"By giving us direct access to PayNow, we can build a holistic payments ecosystem that includes global players in the non-banking sectors as well."

Mr Tan's Liquid Group, whose app Liquid Pay can be used at some 100 hawker centres, runs a completely open platform for which any consumer with a smartphone and a credit or debit card can sign up.

He said: "We believe that making the payment process completely frictionless is essential in driving adoption of e-payment solutions."

But Adrian Chng, chief executive of financial services firm Fintonia, said that building a ubiquitous e-payment scheme is a "network-effect and winner-takes-all" type of activity, and that no single app or solution has so far been able to do it.

Success will belong to that app or solution that wins over both consumers and businesses alike.

He said: "The likely dominant solution is a party that already has a large, engaged base of consumers, and this would naturally extend into payments and is able to subsidise losses in e-payments while making profits elsewhere in the business value chain, such as by using data to improve advertising, or sales in their e-commerce activity."

Such criteria thus favour existing solutions or apps such as Grab, Uber, WhatsApp or AliPay; it is unlikely that an incumbent financial-services provider will cannibalise its own current payment revenue streams and find new revenue sources to compensate that, he said.

Mr Chng added: "Financial payments using tech is, in itself, a low-value activity. A lot of the value is in acquiring merchants and creating security and trust, rather than the actual electronic transfer of payments."

Already, e-payment players are aggressively pursuing merchants by slashing implementation costs and consumers by offering promotions.

Jan Ondrus, associate professor of information systems at Essec Business School, said competition is "rather good news" for users, who can benefit from a variety of incentives.

"Imposing only one e-payment scheme to all Singaporeans would not make sense at this point. MAS is already working on the interoperability issue, which is the right approach. MAS just needs to make sure that any newly-introduced e-payment scheme can be easily integrated to the existing landscape without new costly infrastructure to be deployed."

Aditya Haripurkar, chief executive of P2P- and merchant-payment wallet HitPay, said having a multitude of e-payment options will be great for consumers only if these solutions are interoperable and have the same number of merchant acceptance points.

"Currently, each payment solution has its own unique source of funding, as well as a limited number of merchant acceptance points. This is confusing for consumers, hence the low e-payment adoption rate." Once a level-playing field is established for all e-payment operators, it will be user experience that will dictate the level of adoption, he said.

Andy Li, chief executive of Silot, which creates unified QR-code systems, said the best way to boost e-payment adoption is through use cases that demonstrate the benefits of cashlessness.

He said: "As payment preferences are personal, consumers will not download all the available e-wallet solutions, but will keep only one or two preferred ones."

READ MORE: When a cluttered counter obstructed cashless payments

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