SINGAPORE: For online retailer Berry Lalola, which has no physical store to call its own, cash has always been king.
Customers would usually see their products on e-commerce site Qoo10, order an item and turn up at its warehouse in Ubi to inspect them before paying up – and only in cash since it eschews point of sale systems, said company owner Andrew Lim in an interview with Channel NewsAsia on Wednesday (Oct 11).
However, problems tend to arise when customers forget to bring enough money with them, and there are no automated teller machines (ATMs) nearby for them to withdraw cash, Mr Lim pointed out, which is why Qoo10’s QPay digital wallet is welcomed as it helps solve this issue.
QPay allows users to pay for purchases by scanning the QR code provided by the merchant using any reader or that within Qoo10’s app, selecting the payment mode – MasterCard, Visa, eNETS and Qmoney – then keying in the amount. For first-time users, they can either activate the wallet by purchasing virtual gift cards and topping up with credits or providing their credit card details, explained Mr Jeffrey Toh, senior manager of Digital Category at Qoo10, during the same interview.
Asked why customers could not use other cashless payment methods that do not require a POS, such as PayNow, Mr Lim said the peer-to-peer (P2P) fund transfer system is not available for business banking accounts.
Singapore's push to depend less on cash was highlighted by Prime Minister Lee Hsien Loong during his National Day Rally in August, and since then, there have been much industry movement to help achieve this goal such as NETS announcing its mobile wallet plans and Razer releasing its proposal for having a unified e-payments system in 18 months.
HANDY TO HAVE
Another merchant, Mr Johnny Geh who owns ModernTech and has three physical shops selling electronics, said he only uses the NETS machine and not those for credit cards. He reasoned that it costs too much to pay the S$200 to S$300 monthly administrative fee, which is on top of the 2.8 per cent – 3.5 per cent fee imposed on each transaction.
However, there are always customers who would want to pay with credit cards, particularly overseas travellers who would not have an ATM card to pay by NETS, Mr Geh pointed out. With QPay, customers can pay for the products they want using their credit card, and he doesn't lose out on business.
“Having QPay means I don’t have to run over to my neighbour’s shop and beg to borrow his Visa machine,” he said, and having to wait for the transaction to be processed – via the bank and his neighbour.
Mr Koh added that its e-wallet is also handy for these small retailers when it comes to ad hoc transactions. For example, if someone wants to change out a faulty light bulb on his or her e-bicycle, and it costs S$2.50, they can just scan the merchant’s QR code and pay without cash having to change hands.
Mr Geh concurred, saying this was helpful for him personally, as it means not having to prepare petty cash in his three stores in case of such impromptu transactions.
That’s not to say there are no transaction costs for merchants using QPay – Qoo10 said it charges 3 per cent per QPay transaction, but about 2 per cent of this is to defray transaction fee costs, and it is not meant to help make money for the company.
This fee, though, is lower than what the credit card companies impose, it was keen to add.
ECOSYSTEM THAT BENEFITS ALL
Ultimately, Qoo10 knows that its QPay system is yet another option in an already busy payments landscape – a scenario PM Lee had highlighted when he said there are currently too many different schemes and systems that don't talk to one another.
That said, Singapore country manager HyunWook Cho believes that the solution to getting Singapore to embrace cashless payments is “not just developing another payment gateway but tapping on the existing to reach the optimum capabilities of a cashless transaction”.
In a separate interview on Wednesday, Mr Cho explained that there are different stakeholders in the cashless payment ecosystem comprising merchants, consumers, advertisers and brands and payment platform, which in this case is Qoo10.
The key is to incentivise each group to want to use QPay, he said. It is an approach that ride-hailing service provider Grab believes in as well with its GrabRewards platform.
For consumers, the ongoing fair at Plaza Singapore promoting the merchants using QPay also allows them to redeem giveaways – sponsored by brands – through gamification. In this case, they will have to head down to the mall and “catch monsters” such as 10.10mon and MameQ – similar to Pokemon Go gameplay – to redeem these freebies. They also accumulate points on the Qoo10 platform when they make purchases there using QPay, he added.
On the merchants’ end, the increased footfall and transactions work in their favour. Mr Cho said that on Tuesday, there were more than 75,000 transactions as a result of the fair, and feedback by retailers there have been “good”. The brands involved in the fair also benefit through the increased awareness of their products through the giveaways and increased customer traffic, he added.
“The cashless payment journey will take a long time,” Mr Cho said, but added it will be through incentives like those mentioned that will help make it a sustainable endeavour.