SINGAPORE (THE BUSINESS TIMES) - A new cashless payment solution has been rolled out to help business owners who still largely deal in cash and cheques pay their vendors or suppliers more quickly.
The solution by DBS Bank is based on quick response (QR) code-based and enables instant payments through the bank's fund transfer service PayNow.
It targets the largely cash and paper-based business-to-business payments and collections landscape in Singapore.
This includes the food and beverage (F&B) industry - comprising nearly 28,000 coffee shops, hawker centres and restaurants - where nearly nine in 10 payments among businesses are still made using cash or bank transfers, DBS said on Monday (Jan 20).
The new solution is now being piloted by F&B players to make cashless and faster payments to their suppliers and vendors.
Customers can consolidate multiple invoices into each QR-code based transaction, and have the flexibility to make full or partial payments for one or multiple invoices.
In turn, suppliers can enhance credit terms for each invoice instantly, and also send a QR code requesting payment from customers who are unable to receive goods in-person.
One of the first operators to pilot the new platform is SG5, the main distributor for Asia Pacific Breweries Singapore and wholesale distributor of beer and stout supplies to about 5,600 F&B retailers from coffee shops to large chains.
Its chief executive Alvin Chua said he believes the company will save up to 3,300 manhours a month in accounting and administrative tasks by using the platform.
Mr Jason Toh, 29, who runs Yung Sheng Beverage and oversees its business administration and financial processes, said he is keen to work with DBS and SG5 on the new payment solution.
"Using cash and cheques as payment is inconvenient and takes up a lot of my time. I would prefer to use digital solutions to help simplify our payments processes," he said.
The solution was developed after DBS conducted close to 20 digital workshops with F&B operators to understand their pain points.
"Many SMEs (small- and medium-sized enterprises) we speak to want to realise productivity gains by becoming more digital but don't have the expertise or infrastructure to do so," Joyce Tee, group head of SME banking at DBS, said. The lender is looking to understand SMEs' pain points and then lay the foundation for enhanced payments capabilities one sector at a time, she added.
DBS said it plans to roll out the solution to more F&B players, logistics companies and import/export merchants by the end of 2020.
Separately, UOB in November 2019 launched a QR-based collections solution allowing businesses to collect payments from buyers through PayNow at the point of delivery. Called UOB mCollect, it allows for instant payment and reconciliation and looks to provide an alternative to the cash-on-delivery model mainly used by SMEs.
