Singapore is looking to develop a universal QR code that can support both local and international payment options.
Targeted to be in place by year-end, this common platform was necessary to improve user interface and experience of current digital banking modes, said the Monetary Authority of Singapore (MAS).
Singapore outlines plan to 'catch up' on becoming cashless society
The market regulator said it would co-lead the taskforce alongside ICT regulator, Infocommunications Media Development Authority (IMDA), and had roped in the necessary industry players such as banks, payment services providers including QR service providers, and other government agencies. These include Housing Development Board, Alipay Singapore E-commerce, DBS Bank, American Express International, FOMO Pay, EZ-Link, and Singtel.
Prime Minister Lee Hsien Loong recently highlighted the need to establish interoperable systems including a common QR code, to drive the adoption of e-payments in the country, which had fallen behind others such as China.
Going cashless was a "strategic enabler" to enhance business operations and offer more convenience for consumers, MAS said, adding that it also was an important component of Singapore's smart nation efforts.
It echoed Lee's calls for interoperable systems, which it said were lacking but necessary to allow consumers to make payments to one another regardless of the payment mode. It noted the need for better coordination in the ecosystem comprising banks and relevant industry players.
The recent introduction of a peer-to-peer funds transfer service, called PayNow, was the first step towards establishing an infrastructure that supported interoperable e-payments. The service enabled consumers to pay and receive money using mobile numbers, regardless of the bank they used, and without requiring senders to know the recipient's bank and account number to transfer funds.
Currently supported by seven banks in Singapore, PayNow had since accumulated more than 500,000 registrations and facilitated S$10 million in transfers since its launch in July.
MAS, though, said there was still room for improvements with regards to user interface and experience of banking services operating on PayNow. For instance, SMS notifications could be provided to both senders and recipients after funds had been transferred.
Likewise, there was need to ensure the use of QR code-based payments was seamless, especially since the proliferation of proprietary options amongst smaller merchants would result in fragmentation and inefficiencies.
QR codes had been touted as a practical and convenient way to encourage e-payment adoption amongst cash-based, and typically, small retailers and merchants. Credit and debit cards worked well for larger retailers, but often were not feasible for smaller merchants that preferred cheaper options that required less complex infrastructure, MAS said.
"A common QR code could facilitate payments amongst different payment schemes, e-wallets, and banks," the regulator said. "It would help make payment transactions simple, swift, seamless, and safe for everyone."
The QR taskforce was targeting, by end-2017, to establish standardised specifications to support local and international payment modes. It also would look at the necessary governance and implementation structures for QR payments.
Yeo Hiang Meng, president of the Federation of Merchants' Association and part of the MAS' payment council involved in assessing the use of QR codes, said: "We hope to see intensified marketing efforts to encourage businesses and consumers to adopt mobile payments at heartland shops and hawker centres."
Bringing e-payments to Singapore heartlands
MAS was four government agencies that jointly issued a Request of Information (RFI) for e-payment tools to support micro-payments at local hawker centres, residential or HDB coffee shops, and stores located in Singapore's heartlands. The initiative was part of the government's smart nation efforts and aim to become a cashless society, said the government agencies, which included HDB, National Environment Agency, and Smart Nation and Digital Government Office (SNDGO).
The RFI's objective was to provide an e-payment option that was easy and convenient for hawker centres and HDB shops to implement. "Given the low-value transactions in these places, the solution must be affordable for the merchants, for payments between them and their customers and between them and their suppliers,"the government agencies said.