SINGAPORE: “We are slow,” EZ-Link CEO Nicholas Lee said, straight-faced, when asked if the company is trailing market competitors in being innovative.
In an interview with Channel NewsAsia on Tuesday (Jul 31), Mr Lee said it has been hard work to get the electronic payment system provider to remain relevant in an increasingly competitive marketplace, where it was once the market leader together with NETS.
EZ-Link, set up in April 2002 as a wholly owned subsidiary of the Land Transport Authority (LTA), was not able to press home its market advantage.
Today, a whole host of competitors, ranging from tech giants like Apple, Google, Alibaba and Tencent on the mobile payments end of the spectrum to service providers like Grab and Carousell with their own digital wallets, generate the buzz in the e-payments space. Banks like DBS, OCBC and UOB also offer their own products.
LIMITED BY LEGACY INFRASTRUCTURE
It’s not something that has gone unnoticed by the company. Mr Lee said, candidly, that its efforts to modernise its offerings – including the ability to top up an EZ-Link card using its mobile app – has been somewhat limited by an infrastructure developed more than a decade ago.
For instance, the Contactless e-Purse Application, more commonly known today as CEPAS, was introduced as a standard for e-payments by the-then SPRING Singapore in January 2006 and EZ-Link was the first company to adopt and sell CEPAS-compliant cards in 2008.
However, the CEO pointed out that CEPAS was developed as an offline stored value wallet, and the dollar value stored is linked to the SIM embedded in the card. This means it’s not possible to offer the convenience and ease of use provided by other rival mobile payment options from Apple and Google, and more recently, NETS.
Instead, what it has today is giving consumers the ability to top up their EZ-Link cards via its EZ-Link mobile app. And it is keen to highlight efforts to make the user experience appealing for commuters.
Mr Lee said the activation of one's EZ-Link account on the app has been shortened and, for Android smartphone users, they can top up their cards with their mobile devices and without having to visit a general ticketing machine.
“It’s not ideal (to still need the physical card for top ups), but we work with what we’ve got,” Mr Lee said.
System limitations aside, external factors are also making its efforts to remain relevant a challenge.
For instance, LTA's account-based ticketing pilot which took off with Mastercard as partner in July 2016, would appear to make the need for EZ-Link cards for transport increasingly unnecessary. The initiative allowed Mastercard holders to tap their contactless credit and debit cards to pay for train and bus journeys and track their fares via an app or portal. Visa and NETS came on onboard in June this year after “encouraging” pilot results.
LTA has also trialed the use of mobile payment - specifically Apple Pay, Android Pay and Samsung Pay - with a select group of Mastercard users since March this year.
When asked if account-based ticketing will make EZ-Link cards redundant for commuters, Mr Lee maintained that it does not.
“We will still have space to play in,” he elaborated. “There will always be people who aren’t comfortable having credit cards as well as those holding concession cards.
“There will always be a need.”
“WE ARE NOT HERE TO COMPETE”
The company, he said, has been embarking on a digital push, in terms of making things more seamless and quicker. These include tying up with NTUC and its LinkPoints rewards programme, as well as mobile virtual network operator Circles.Life. It has also introduced EZ-Pay, which enables motorists to pay for ERP fees using their credit cards.
“When we extend our ecosystem, we hope to cater to different age groups and demographics in our society,” the CEO said.
“We are not here to compete with others, but to stay relevant,” he added, saying that EZ-Link does not need to meet the needs of people at every point of their lives so long as it remains relevant at different stages and for different needs. For example, a young adult may use other payment methods for various activities but they may turn to EZ-Link for their motoring and parking needs, he said.
“We want to make sure in the whole cradle to silver (generation) journey, people remain with us and that it’s a seamless experience.”
Mr Lee also pointed to two other initiatives the company is looking at to encourage people to go cashless.
Besides cutting down the EZ-Link activation period from days to a mere minute, EZ-Link is also looking to do away with charging a convenience fee of 25 cents per top up via the app from August. It is already being done for DBS, POSB and Citibank account holders, but it will be extended to other banks as it wanted to “incentivise people for going cashless”, he said.
The company has also tied up with local convenience store chain Cheers to introduce loose change top ups. Consumers who receive change from their purchases there have the option of topping up their EZ-Link cards with the coins they will otherwise have to pocket, and for free, he explained.
This was first announced in February this year, and the service is now available at all Cheers outlets, he said.
That’s not all. The company has a roadmap extending into 2019 to digitalise its stored value card offering.
Mr Lee said his people have been migrating the systems into a cloud-based one, so consumers can create a digital wallet linked to their existing CEPAS EZ-Link cards. In the future, people can go to a general ticketing machine, tap their cards and convert their offline wallet to an online one. The physical card can then act as a credit card of sorts, with value that can be topped up remotely.
That, at least, is the plan.
“We want to do this, and will, but the surrounding infrastructure for public transport will have to be upgraded too,” he said.