Mobile payments: Is Singapore behind the curve?

Mobile payments: Is Singapore behind the curve?

Channel NewsAsia explores why analysts think mobile wallet payment methods have been slow to take off in Singapore.

SINGAPORE: Apple Pay, Android Pay, DBS PayLah!, Dash and Liquid Pay are just some of the growing number of mobile payment options that have transformed the way purchases can be made in Singapore. Consumers simply need to use their smart mobile devices to pay for their purchases at the cashier without having to take out their wallets.

However, analysts say these methods have been slow to take off in Singapore, despite their ease of use.

‎Digital Business and Risk Assurance leader at PwC Singapore Greg Unsworth said that in developed economies like Singapore, which have well-established payment mechanisms in place, consumers do not feel as compelled to make the switch to mobile payments – unlike in emerging markets like Indonesia and Myanmar.

“In a lot of emerging markets, you have young populations that are growing up and having that spending capacity, but you don’t have that (banking) infrastructure available,” he said.

“Quite often across a number of emerging markets, perhaps only about 40 per cent of the market is a banked society, yet there’s access to mobile phones to 90 per cent of the population. So the ability to transact through mobile devices and mobile payments is very compelling in those markets.”

A GROWING MARKET

One consumer, 57-year-old Philip Chan, pointed out that there was no push to make the shift to mobile payments just yet.

"I’ve been paying with cash, NETS and credit cards for many, many years. I never felt the need to (use mobile payment), because it’s so easy (to use),” he said.

Ms Linette Lin, 29, shared that she only began using mobile wallet payments after her bank started to offer it: “I started using it as an experiment, but as time progressed, I realised there were a couple of merchants who were giving incentives.

“That was a huge push factor in using mobile wallet payments.”

Ms Lin did note that it is not an instinctive mode of payment as there are other more readily available options such as cash, NETS and credit cards. 

According to a Singapore Payments Roadmap report commissioned by the Monetary Authority of Singapore in 2016 - and conducted by auditing firm KPMG - Singapore demonstrates technological readiness for mobile payments.

The report pointed out that Singapore's population has one of the highest access rates to banks, smartphones and wireless broadband services in Southeast Asia. But the use of mobile devices for payments remains relatively small.

The study noted that despite this, there is a growing market for mobile wallet payments. An increased use of 42 per cent was reported between 2013 and 2016, as well as more merchants now accepting the use of mobile payments.

A majority of consumers surveyed also said they saw physical payment cards being replaced by smartphones, mobile devices and wearables as "quite likely" in the future.

INCREASINGLY DIGITALISED WORLD

Mr Unsworth added that in an increasingly digitalised world, people simply cannot do without their mobile phones anymore.

"It's just as likely you're going to leave your cash behind as opposed to your phone,” he said. “In fact, the phone is usually the most valuable item that people carry with them these days. The device is always with them, it's almost an extension of them."

However, with increased use of these devices, there are concerns over the security of such payment modes. This, and a lack of incentives to move away from their comfort zone, are other reasons why mobile wallet payments are taking off slowly in Singapore, Mr Unsworth added.

“The key thing is: Do they trust the mechanism of the infrastructure they’re using? Do they trust the provider? That’s absolutely essential before thinking about anything else,” he said. “One of the things that slow down mobile payments in Singapore is that it’s very easy to access the traditional banking sectors.

“It’s still ATMs everywhere. In many parts of society in Singapore, cash is used quite widely. I think if some of that changes, then the new mobile platforms become more compelling."

Banks here are hoping to change this and speed up the adoption of mobile payments.

Earlier this month, the Association of Banks in Singapore launched PayNow – a service that allows customers of seven participating banks to send and receive money to each other just by using their mobile number or identity card number.

Country head of personal financial services at United Overseas Bank Singapore Jacquelyn Tan pointed out that electronic payments - that include both digital as well as mobile modes - have grown in the past year.

“Year-on-year, we’ve seen that transactions have grown about 25 per cent,” said Ms Tan. “Within that arena, there are contactless payments that can take across different form factors of plastics, wearables or even mobile phones. That in itself has grown about 120 per cent year-on-year.

“We saw the decrease in over-the-counter cheques and cash payments by about 15 per cent year on year.”

She added that the trend of double-digit growth is expected to continue for the next three years. 

OCBC, too, revealed last week that since the launch of PayNow, close to 100,000 people have linked their mobile or NRIC numbers to their personal OCBC bank accounts to facilitate fund transfers.

These customers can also create and send personalised QR codes to other Pay Anyone users from the bank via social networking apps or email when requesting payment, and the daily transfer limit for payers is S$1,000, the local bank said.

BUSINESSES BENEFIT FROM MOBILE WALLET USE

It is not just banks that are seeing this growth. Businesses have noted an increase in sales brought about by seamless payment experiences through digital or mobile modes.

Food delivery company Deliveroo is one such business. The company, while less than two years old here, said it has recorded a growth of 30 per cent month-on-month.

General manager Siddharth Shanker said: “It’s already a massive business with hundreds of thousands of customers with close to 3,000 restaurants and 2,000 delivery riders on the road. A huge part of it has been the food selection and the customer experience, and part of the customer experience is payments.

“So we see that people who are paying or using the app they tend to come back again and again." 

Source: CNA/ek

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