SINGAPORE - By this time next year, Singaporeans will likely be able to transfer funds to each other without needing to know the recipient's bank account number.
Monetary Authority of Singapore (MAS) managing director Ravi Menon revealed this on Friday (Aug 19) as he mapped out the regulator's vision for the Republic's payment landscape.
Mr Menon had announced in October last year that the banking industry was exploring ways to enable money transfers using only mobile phone numbers. This is the first time he has given an update on when this plan might be a reality.
He noted that Singapore was a first mover in the world when it introduced Fast - the interbank fund transfer system that allows people to tranfer money to each other instantaneously around the clock.
However, the fact that people have to key in the recipient's bank account numbers has been a barrier to widespread adoption, Mr Menon said in a speech at a fintech conference organised by the Sim Kee Boon Institute for Financial Economics at Singapore Management University.
"So the Association of Banks in Singapore (ABS) has been working hard to develop a central addressing scheme which would allow payments to be made through Fast using only a recipient's mobile number or NRIC number or unique identity number," he said.
"If all goes well, by this time next year, we will no longer need to remember the bank account numbers for a majority of our electronic fund transfers."
Mr Menon also called on banks to adopt a more accurate pricing model to encourage businesses to use e-payments.
While making Fast transfers is free for individuals and consumers, small and medium-sized enterprises have complained that they are charged up to S$10 for fund transfers made via Fast, he noted.
"But (banks) offer free cheque payments every month. This is surprising. Our own studies indicate that the marginal cost of e-payments, including Fas`t fund transfers, should be far lower than that for cheques," Mr Menon said.
"Cheque processing is a resource-intensive operation that is far from costless."
The regulator and industry are making several other moves to take Singapore's payments infrastructure into the future, he noted.
Aside from promoting online fund transfers, their ongoing initiatives aim to simplify the acceptance of card payments at retail outlets, facilitate the online payment of bills and enable mobile payments for public transportation.
For example, debit and credit cards are widely used but not all cards can be used everywhere, and consumers often have to ask merchants whether a certain card is accepted, Mr Menon said.
"A common sight in Singapore... is the array of multiple point of sale terminals cluttering up the cashier's counter," he added. "This is confusing for customers and unproductive for counter staff."
The ABS has asked the payment industry to develop a unified, single point of sale terminal which can accept all major credit brands, including those that are contactless or that are embedded in smart phones.
About 1,000 of these terminals have been rolled out at convenience stores and another 10,000 are expected to follow in the next two years, Mr Menon said.