National Day Rally: Necessary Push for Evolution of Cashless Payments
The 2017 National Day Rally focused on three crucial points, one of them being the need for Singapore to step-up in its adoption of technology, in particular, the area of cashless payments:
The Prime Minister (PM) of Singapore mentioned that although our nation has all the right ingredients to fulfil the Smart Nation Initiative, we are lagging behind considerably in the adoption of cashless payments. This is an area that China, despite its geographical size, is leading in.
Our shortfall in cashless payment adoption is a result of the lack of education on the advantages of digital payments. This is especially so amongst the older generation where security is a key concern. Additionally, our current fragmented systems make the adoption of cashless solutions less convenient.
The draw of going cashless
Aside from lighter wallets and being able to track one’s expenditure, the advantages of going cashless are many. Going cashless is less risky – one can easily disable accounts if one loses a phone, unlike cash or credit cards. From a government’s perspective, cashless solutions will dispel the fears of counterfeit currency circulating in an economy. India is a great example of a country hoping to combat corruption through a move to digital payments.
Initiatives Moving Forward
The government seems to be doing its part and will continue to do so.
The wheels are already turning to create this transition with the introduction of PayNow. This mobile solution links bank accounts to a person’s mobile number or identity card number. Through PayNow, users can send funds to others without having to type out the bank account numbers.
PM Lee also revealed the upcoming introduction of parking.sg that will introduce cashless payments to the local parking scene. This is a welcome change to the current use of coupons that have been around for close to 40 years. He also made reference to the efforts to simplify and integrate electronic payment systems that are underway, including making such a method available at hawker centres.
Some companies such as ComfortDelGro have already launched initiatives to embrace digital payments. They now allow all customers to pay for both bookings and street-hailed rides with the Masterpass digital payment service. All that needs to be done is for customers to access an app on their mobile to scan the QR Code that is on the taxi’s cashless payment terminal or key in the taxi number to pair the trip to Masterpass.
What this means for the fintech sphere
The fintech industry has all to gain from the abovementioned topic covered in the rally.
The government will be looking for companies that create disruptive technology to aid the process efficiently and those that are capable of providing solutions will receive attractive remuneration – both financially as well as by elevation of their brand equity. The various government departments will also be looking to encourage innovation and will presumably provide funding (in the form of grants etc.) to expedite development.
An example of the urgency of the matter was seen in plans to develop a common QR code for Singapore, making it easier for consumers and small businesses to send and receive money via PayNow. This will be rolled out in the next 6 months.
It didn’t take long for the nation to respond. Razer’s CEO communicated with our PM via twitter 24 hours later, hoping to get a nationwide e-payments solution proposal to him within 14 days. According to reports, industry experts soon followed suit. Expect the next few months to be filled with government tenders and announcements to further advance the points brought out at the rally. In terms of stepping up and catching up with technology, it’s safe to say that we are on track to fulfilling our Smart Nation initiative.