Why It Matters

Timely move in cashless drive

Imagine if every credit card on the market was accepted by only a few merchants, and that different merchants took only certain cards.

If you wanted to use credit cards for all your purchases, you would need maybe 10 different ones, each issued by a different bank.

That is exactly the kind of situation the Government hopes to avoid in the e-payment landscape - except, instead of credit cards, we are talking about mobile payment apps.

A recently formed payments council, set up to look into ways to advance e-payments here, said on Tuesday that it had created a task force specifically to develop a common QR code for Singapore that could be used for e-payments islandwide.

A QR - quick response - code is a square barcode used for scanning all sorts of data onto smartphones.

The idea is that all banks here would be able to integrate this standardised QR code into their e-payment apps. So, as a customer, it would not matter if you had a DBS Bank, OCBC Bank or United Overseas Bank (UOB) account and app - you would be able to use your e-payment app of choice at any merchant that accepts e-payments.

Mr Pranav Seth, OCBC's head of e-business, business transformation and fintech and innovation, said that for Singapore to go truly cashless, "we need to avoid fragmentation by closed loop systems".

In a closed loop system, the merchant and customer need to be with a single bank or organisation to facilitate the payment.

Ms Jacquelyn Tan, UOB's Singapore head of personal financial services, said the move towards an inter-operable payment system, as it is called, "will create a simpler and more convenient way for consumers to pay and for merchants to be paid".

It is a timely move as well. Developing a standardised e-payment system now ensures Singapore's financial institutions are marching in a unified direction, and customers will not need 10 different e-payment apps just to go shopping.

A version of this article appeared in the print edition of The Straits Times on September 01, 2017, with the headline 'Timely move in cashless drive'. Print Edition | Subscribe