Cashless payments: Two firms develop digital tokens for retail network

 Online marketplace Qoo10 has some 1,200 retailers using its QR-code based system, QPay.
Online marketplace Qoo10 has some 1,200 retailers using its QR-code based system, QPay.PHOTO: ST FILE

iFashion's tokens, called MegaX, will be transacted using smartphone wallet software

As e-payment firms battle for dominance in Singapore's race to go cashless, a few companies are rolling out their own payment solutions aimed at boosting retail spending.

Singapore-based companies iFashion Group and MC Payment, for example, have developed digital tokens for use in iFashion's retail network, both online and at physical locations, that could see its brands and events go totally cashless.

And online marketplace Qoo10 has some 1,200 retailers using its QR-code based system, QPay.

iFashion's tokens, called MegaX, will be transacted using smartphone wallet software and are part of what the company calls a "movement" to reinvigorate millennial spending, the group's chief executive Jeremy Khoo told The Straits Times.

Among iFashion's stable of lifestyle and fashion brands are Megafash and Dressabelle, as well as pop-up store rental and events management company Invade, which organised the first Artbox event here this year.

The local edition of Bangkok's famous flea market drew about 600,000 visitors over six days.

Part of the reason for current retail woes is the failure of brands to effectively engage millennials, said Mr Khoo, 34.

Fees for MegaX transactions will be about 0.3 per cent, compared with the 2 to 3 per cent typically charged to merchants by credit card companies...

An e-commerce marketplace using the tokens as currency will also be launched with listings by 1,000 brands by the end of the year.

"We have to understand what millennials want, and it's not about shoving discounts in their faces, but exclusivity, trends, being part of something bigger than themselves," he said.

"The promise of digital currency is driving down the cost of transactions for the merchant," said MC Payment's director of sales and business development Christopher Low.

Fees for MegaX transactions will be about 0.3 per cent, compared with the 2 to 3 per cent typically charged to merchants by credit card companies.

MegaX is based on blockchain technology, which is a digital ledger that uses encryption to limit tampering and is publicly accessible.

iFashion retailers will begin to accept the tokens as a form of payment next month, and there are plans for MegaX to be used at future events, including next year's Artbox.

An e-commerce marketplace using the tokens as currency will also be launched with listings by 1,000 brands by the end of the year.

Qoo10's QPay extends discounts and loyalty rewards accumulated on Qoo10's e-commerce platform to purchases in merchants' bricks-and-mortar stores.

The QR code payment system was launched last October, and has boosted merchants' footfall by allowing customers to browse items online and see and touch them in-store, said Qoo10's Singapore country manager Hyun Wook Cho.

QPay has ambitions to become the most widely used cashless payment system in the nation. Like other QR code-based payment systems such as Alipay, shoppers scan a code generated from a smartphone app.

But with many players in the fragmented e-payment sector, competition is stiff.

Said Associate Professor Robert Kimmel, head of the Department of Finance at the National University of Singapore Business School: "Just walking into a coffee shop, you see eight or 10 different payment systems... A good solution would be to unify them."

A version of this article appeared in the print edition of The Straits Times on October 18, 2017, with the headline 'Two firms develop digital tokens for retail network'. Print Edition | Subscribe