Singapore striving for domestic and regional e-payments interconnectivity
Above photo: Mr. Ong Ye Kung, Minister for Education (Higher Education and Skills) and Second Minister for Defence speaking at the Singapore FinTech Festival/ Credit: MAS (from Twitter page of MAS)
In a speech on November 13 at the Singapore FinTech Festival, Mr. Ong Ye Kung, Minister for Education (Higher Education and Skills) and Second Minister for Defence, said that the largest merchant acquirer in Singapore, NETS, will establish a framework to enable cross-border payment linkages with the National Payment Corporation of India or NPCI. This is part of Singapore’s towards e-payments interconnectivity not just domestically, but also with neighbours and regional countries.
NPCI is an umbrella organisation for operating retail payments and settlement systems in India. It is an initiative of India’s central bank, Reserve Bank of India (RBI) and Indian Banks’ Association (IBA) under the provisions of the Payment and Settlement Systems Act, 2007, for creating a robust Payment & Settlement Infrastructure in India. Since demonetisation (all 500 and 1000 Rupee notes, accounting for 86% of all currency in circulation, ceased to be legal tender) in November last year, the Indian Government has been pushing to boost digital payments in the country and NCPI is playing a key role.
From the middle of 2018 onwards, anyone who holds a NETS card in Singapore can make online purchases on any NPCI e-commerce merchant website in India.
NETS is also working with NPCI to allow NETS payments at all 2.8 million RuPay point of sale terminals in India. Conversely, a RuPay customer can use his RuPay card or RuPay-enrolled mobile phone to pay at any NETS acceptance point in Singapore.
RuPay is an Indian domestic card scheme conceived and launched by the National Payments Corporation of India (NPCI). It was created to fulfil the Reserve Bank of India’s desire to have a domestic, open loop and multilateral system of payments in India
UOB (United Overseas Bank) and DBS have also made inter-connection arrangements with UnionPay, which is the dominant payment card platform in China. UOB or DBS UnionPay Cards can be used at all UnionPay terminals in China.
Mr. Ong said, “We have started in a small way with India and China, and will progressively work towards interconnectivity with other countries.”
He was talking about Singapore’s e-payment initiatives. He said, “In Singapore which is a city-state, we want to ensure that our systems are open loop. They should be interoperable, and yet convenient. This may mean we have to put in some regulations, but these measures should not be over-bearing.”
The Monetary Authority of Singapore (MAS) worked with the industry to lay the infrastructure that will support an interoperable e-payment system. FAST was launched in 2014, followed by PayNow in July this year. FAST is Singapore’s 24x7 real-time inter-bank retail payment system. PayNow is built upon FAST. It links bank accounts to mobile phone numbers or personal ID numbers, and enables people to make inter-bank transfers into and out of their bank accounts using just the mobile phone number or personal ID number. The secure, always available service is free to use for individuals.
Within less than 5 months, over 600,000 Singaporeans have registered for PayNow. Mr. Ong said that people are using PayNow for everyday transactions like splitting lunch bills and sharing the cost of joint purchases.
But businesses stand to gain the most in efficiency and cost reduction by adopting e-payments.
PayNow will therefore be extended to businesses around the middle of next year. Businesses will be able to link their Unique Entity Numbers, or UENs, to their bank accounts. This will allow businesses to pay each other, or receive payments from customers, through their UENs.
Update: In his speech at the Singapore FinTech Festival on November 14, Mr. Ravi Menon, Managing Director of MAS, revealed that MAS and the Bank of Thailand have agreed to work together to link PayNow and PromptPay. PromptPay is Thailand's version of PayNow, enabling real-time, 24/7 domestic payments from one bank account to another. The aim is to enable someone in Singapore to send money to someone in Thailand, and vice versa, using just their mobile phone numbers, instantly, securely, and at any time of the day.
Many other e-payment solutions have emerged, using different tokens and apps for different member groups, which can be confusing for people. To minimise confusion and ensure convenience and ensure that all solutions adopt the same uniform point-of-sale interface, the Singapore Government is working with the industry to make e-payments adoption more pervasive and convenient.
Through the Payments Council, nation-wide common QR specifications for e-payments (SGQR) will be set next year. The major banks, e-wallet providers, and payment schemes are part of the initiative. From next year, the SGQR will be progressively rolled out across the island.
Mr. Ong said, “So in the very near future, when you walk into a shop that accepts QR code payments, you should only see SGQR with all the acceptance marks underneath it. If your payment method is accepted by the merchant, you just need to use your smart phone to scan and pay to a single SGQR.”
MAS and the banking industry have also been working on a unified point-of-sale, or UPOS. More than 17,500 UPOS terminals have been deployed at merchants like supermarkets, convenience stores, fast food chains, and government agencies. Over the next two years, thousands more UPOS terminals will be rolled out.