Users of the DBS PayLah! app can now make and receive payments via QR codes, while OCBC customers will soon be able to do the same.
Users of the DBS PayLah! mobile wallet - they do not have to be DBS account holders - can now use the app to generate their own QR code to receive cash.
A QR, or Quick Response, code is a square barcode that can be used to store data that can then be read by an imaging device such as a camera. To receive payments, merchants or individuals can display their QR code or send it via online channels to the payer.
App users can make payments by scanning a merchant's QR code.
The bank said in a statement on Thursday that this would be especially useful when making purchases at cash-only businesses, many of which have resisted cashless payment options as they see the leasing of payment terminals, connectivity and wiring requirements as inconvenient and costly.
It is estimated that more than 80 per cent of payments made at small shops here are in cash and the percentage rises to 90 per cent at hawker centres and wet markets, DBS noted.
"We believe that cashless payment in Singapore is ripe for disruption. Singapore has one of the world's highest smartphone penetration rates and surveys have indicated that the majority of consumers here are open to making payments with their mobile devices," said DBS' head of consumer banking, Mr Jeremy Soo.
"All we need is a solution that has a low barrier to entry, is easy for merchants to implement and for consumers to use."
DBS PayLah! users will also soon be able to make QR code payments on Nets terminals at a number of merchants across the island, including transport, retail, fashion and food and beverage outlets.
About 2,000 Nets terminals will be enabled with this capability in the next two months, and 10,000 by the end of the year, DBS said.
Meanwhile, OCBC announced, also on Thursday, that from next month, its account holders will be able to make cashless transactions via QR code at selected Nets merchants by using the OCBC Pay Anyone service. Customers can use OCBC Pay Anyone to scan a merchant's QR code and proceed to make payments of up to $1,000 a day, without the need for a card and PIN.
"Unlike some mobile wallets, which require top-ups from a deposit account, OCBC Pay Anyone provides the convenience of directly debiting customers' accounts, making the payment instant and completely frictionless," said Mr Aditya Gupta, OCBC's Singapore head of e-business.