From PayNow to unified system that pays everything

StanChart CIO urges Govt to lead industry initiative to co-develop this

PayNow, the fund transfer system that allows people to send money to one another using just a mobile number or NRIC number, is a great step towards a cashless society.

The next step is to develop it further so that it can also be used to pay for purchases, even at wet markets, hawker centres and other small businesses, said Standard Chartered chief information officer Michael Gorriz.

For this to happen, he said, the Government should lead an industry initiative to co-develop a standardised system that is convenient and can be used by all merchants and customers, regardless of whom they bank with.

"I would look forward to the Government to take the lead on this," he said.

"We could introduce a standardised system of dynamic QR codes so that the merchant has an app, puts in the amount to charge, and the QR code shows up. You, the customer, then scans the code with your mobile phone and the transfer is done."

A QR or quick response code is a type of bar code read by devices.

Another key issue is cost.

One reason why many merchants have been reluctant to accept non-cash payments is that they have to pay fees when handling credit card and digital transactions.

However, Dr Gorriz noted, PayNow eliminates this problem.

"Let's face it, handling cash is not free. It is expensive - you have to count it, deposit it somewhere and there are sometimes errors.

"As a matter of fact, with PayNow, we have the opportunity to bring the cost of digital transactions down to almost zero, because there is no handler or intermediary. You could pay directly from your bank account to the merchant."

OCBC Bank's head of e-business, business transformation and fintech and innovation, Mr Pranav Seth, said a unified QR code "can only spell good news for the industry".

"We believe in open platforms where all merchants and financial institutions can participate in a common payment ecosystem to benefit customers," he said.

In the absence of an industry-wide initiative, at least one bank has started taking steps to get small retailers on board the QR code train.

DBS Bank has sent "ambassadors" across the island to educate small, cash-based merchants, primarily hawker stalls, wet-market vendors and neighbourhood stores, on the benefits of going cashless, and encourage them to adopt DBS PayLah! QR codes as a payment method.

Some 700 merchants have already come on board, with more in the process of doing so, DBS said.

Dr Gorriz noted that PayNow also represents Singapore's progress in adopting digital identities. Another initiative in this area is MyInfo, a government-backed digital vault of Singaporeans' personal data.

MyInfo pulls data - such as one's name and registered address - from seven public agencies, so that people can update their contact details at various agencies, apply for flats or even open a bank account at four banks here, without having to fill out a full application form.

StanChart is one of those banks, alongside OCBC, United Overseas Bank and DBS, as it fully believes in the benefits of embracing digital identities, Dr Gorriz said.

"For the customers, it's convenient - they only have to store their personal data in one place. For the banks, they get high-quality information and can process the input much more easily than if they received paper applications, and for the Government, it gets to ensure that the data is stored in one place and it can keep track of what is going on."

A version of this article appeared in the print edition of The Straits Times on July 10, 2017, with the headline 'From PayNow to unified system that pays everything'. Print Edition | Subscribe