At Singapore’s recent National Day Rally, Prime Minister Lee Hsien Loong highlighted that while Singapore has the right ingredients to become, what has been dubbed, a ‘Smart Nation,’ there is still much to be done.
PM Lee lamented that while Singaporeans do have access to e-payments options, there are too many different systems that “don’t talk to one another.”
This situation is costly for businesses, with many consumers also finding that some e-payment options have more downsides than upsides when it comes to convenience. This has resulted in many consumers preferring to use cash and cheques, which account for 6 out of 10 transactions.
Despite this fragmentation within the local payments ecosystem, Singapore has been a hotbed of innovation when it comes to electronic payments, with many FinTech startups offering innovative solutions, as well as banks launching new services to improve customer experience.
The Singapore Government is now focusing on fostering greater collaboration, as well as leading the way with initiatives such as FAST (Fast and Secure Transfers) and the recently launched PayNow to ensure a swifter shift to a cashless society.
Ultimately, initiatives to ensure a measure of standardisation and simplification – such as the QR code-based system unveiled by PM Lee at National Day Rally – will also need to be mindful of the need to stay inclusive and provide choice.
Given Singapore’s regional significance and centrality, many payment instruments from other countries, such as Alipay or WeChat Pay, have naturally made their way here. This is resulting in a lot of fragmentation in the payments ecosystem, with a multitude of cards and mobile payment options available on top of cash.
As electronic payments mature, it will ultimately be up to the customer to decide what works best for him or her. Displacing cash often needs to be linked with additional benefits that can be gained from digital payments, ease of use, speed, visibility and protection but also loyalty-type rewards.
Banks, in this new payment ecosystem, need to be consistently prepared for digital transformation. From introducing new services, supporting government lead initiatives to providing strong but seamless authentication, banks will need to keep up with the accelerating speed of change whilst ensuring the evolution and availability of their systems.
ACI’s 2017 Global Consumer Fraud Report, which surveyed respondents across 20 countries, revealed that Singaporeans exhibited a very low level of trust in terms of how well online merchants protect their information, with only 36% of respondents from Singapore saying that they trusted firms with their data, compared to 60% in India.
65% of Singaporean respondents also indicated they would stop shopping with a given merchant after experiencing fraud or a data breach. However, Singaporeans also indicated a very high level of trust in the Singapore government’s data protection capabilities.
This indicates that Singaporeans are well-informed when it comes to the risk of fraud, and that businesses will need to work hard to win back their trust once lost. Adopting strong fraud prevention capabilities should therefore be a focus for these businesses, as well as better communicating what they’re doing and why – in order to build trust.
Despite its strong reliance on cash, Singapore is a digitally savvy community as shown by the strong growth of contactless payments. Ultimately, providing trusted, secure, ubiquitous and easy-to-use digital payments will be the path towards simplifying Singapore’s electronic payments landscape.
Featured image via pixabay
