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Singapore’s central bank, the Monetary Authority of Singapore (MAS), has outlined strategies to promote electronic payments in the island state.
Singapore Payments Roadmap is a joint effort by MAS and KPMG, aimed at making swift, simple, secure payments possible to improve convenience for consumers and productivity for businesses.
More than 2,500 stakeholders in Singapore’s payment ecosystem and worldwide were surveyed to understand the current state of payments, focusing on how consumers and businesses make payments.
Ravi Menon, managing director at MAS, acknowledged that financial technology (fintech) is changing the face of payments.
“Every month, MAS meets many fintech firms that do not fit neatly into categories such as remittance or stored value,” he said.
“Our vision is to make Singapore an electronic payments society society that spurs continuous innovation in payments technology – a society that gives consumers maximum convenience and confidence in making payments; that enables firms to increase productivity through payments integrated with business processes; and where swift, simple and secure payments is a reality for everyone.”
Menon outlined four key strategies to create an e-payments society in Singapore: streamlined regulation, inclusive governance, interoperable infrastructure and pervasive digitisation.
The first strategy is to create a single piece of legislation governing traditional and innovative payment companies. It will also enhance the provisions for consumer protection and strengthen cyber security requirements.
“It is not efficient for companies to be regulated under two pieces of legislation that were not written with the fintech products of today in mind,” said Menon.
Another strategy MAS is considering is to set up a payments council to co-ordinate key initiatives, such as promoting interoperability and adopting common standards.
Read more about payments in Singapore
- City state is considering developing a payments system similar to the UK’s Paym, which allows people to send money using just a mobile number.
- Singapore is the first nation in the Asean region to get the Apple and Samsung mobile payment services.
- Commuters in Singapore may be able to make contactless payments using wearable devices if trial is successful.
It also plans to build an interoperable payment infrastructure. KPMG found that while Singapore’s payment landscape’s “underlying infrastructure is world-class”, there is still a heavy reliance on cash and cheques.
Specifically, this strategy will involve promoting online fund transfers, simplifying acceptance of card payments at retail outlets, facilitating online payment of bills and enabling mobile payments for public transport.
The fourth plank is to help businesses to digitise their processes and integrate them with electronic payments products, to maximise productivity and efficiency gains.
According to Sandy Shen, research director with the e-commerce team at Gartner, the proposed strategies will help to level the playing field for e-payments players.
“In particular, the smaller and alternative players will have a chance to compete with innovative products. Overall, the proposed strategies would be good news for consumers and businesses alike,” said Shen.
“It should move it to the next level by installing interoperability, lowering costs and moving further to digital payment.”
However, Shen said some challenges remain: “These are high level strategies and there could be implementation details where issues can rise.”
“At this point, they need to get input from as many stakeholders as possible to consider all implications. Of course, there is no strategy that can make everyone happy, so there will be trade-offs.”