Singapore made another step towards becoming a cashless society with a new fund transfer option that requires just a mobile phone number or NRIC number.
The PayNow system, which will start on July 10, will be offered by seven banks.
People who want to receive payments will have to link their mobile and NRIC numbers to their accounts, either on the bank's website or through its mobile app.
One bank account can be linked to one mobile number and one NRIC number, and the sender will be able to see the recipient's name before confirming the transfer.
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The push towards innovation in payments will help address an issue highlighted by Prime Minister Lee Hsien Loong earlier this year when he said that compared with other countries, Singapore could do more to promote cashless payments, in hawker centres, in shops and between people.
Finance Minister Heng Swee Keat told the annual Association of Banks in Singapore (ABS) dinner last night that a Payments Council led by the Monetary Authority of Singapore (MAS) will be set up. Its 18 representatives from banks, payment companies, industry associations and businesses will discuss payment strategies and promote solutions.
BANKS PARTICIPATING IN PAYNOW SERVICE
United Overseas Bank
Standard Chartered Bank
NOTE: From July 10
MAS is also reviewing the regulatory regime for payments, he said.
He added that the Government is looking into using PayNow to make payments directly to people's bank accounts using their NRIC numbers.
This would eliminate the need to "update each government agency one by one when we change banks. We will just need to link our new bank account to our NRIC via PayNow".
ABS director Ong-Ang Ai Boon stressed the need to "move to the digital world", adding that customers want a "fast, convenient, frictionless, safe, secure" service, and do not want to have to remember bank account numbers.
Mrs Ong said digital transactions are more productive and efficient than cash and cheque clearances, which are slower and more costly.
PayNow rides on FAST, a transfer service launched in 2014 which enables customers of 19 banks to transfer funds almost instantly.
The seven participating banks cover about 90 per cent of retail transaction volume here.
Ms Jacquelyn Tan, head of personal finance services for UOB, said its customers have embraced FAST, with a 92 per cent increase in such transactions from 2015 to 2016. In contrast, over-the-counter cash and cheque transactions have fallen by almost 15 per cent.
Mr Jeremy Soo, head of consumer banking at DBS, said FAST transactions grew 42 per cent last year.
Mr Pranav Seth, head of e-business, business transformation and fintech and innovation group at OCBC Bank, said its PayAnyone electronic service has seen transactions increase fourfold, while payment volumes have shot up tenfold.
"It is a war on cash," he said, adding that PayNow will make digital payments easier in many cases than using cash.
Professor Teo Hock Hai of the School of Computing at the National University of Singapore said a "mobile number is easy to remember and enter, and will facilitate consumer-to-consumer payment and transfers tremendously".
However, he noted that consumer-to-consumer payments make up only a fraction of total volume, and the real challenge will be transactions between merchants and customers.
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