Many would agree that the National Day Rally 2017 was a catalyst for much-needed change in the local digital payment arena. PM Lee delivered an honest and somewhat satirical viewpoint of our local landscape that has been moving at snails pace – paling in comparison to countries such as China where purchases are often transacted digitally. What was to follow was a scurry of proposals for solutions to the problems at hand. Singapore style:
Integration key to success
We often hear that platforms need to speak to each other to work and this is especially true in the digital payments arena.
One of the many reasons why Singapore has been slow to adopt such technology successfully is that our financial institutions and digital vendors have been working autonomously for the longest time.
What the country requires is a common platform that connects banks and relevant industry players with consumers to fix this issue. Aside from this, there has to be enough stimulus for both vendors and consumers to adopt the technology.
Fast forward several months and it has been decided – almost unanimously –that the solution to the issue will lie in the creation of the common Singapore Quick Response Code (SG QR), slated to be adopted by payment service providers in Singapore next year.
In the case of the SG QR, customers will be able to use the banks’ apps to scan the Nets QR code displayed at hawker stalls, for example, before keying in the amount they need to pay.
QR code technology will act as a strategic enabler to enhance business operations and offer more convenience for consumers, according to the Monetary Authority of Singapore. The regulator has also commented that QR codes are the way forward for smaller retailers who prefer less complexity than credit and debit card payments offer. Taking hawker stalls as an example again, NETS will provide hawkers with a monthly report consolidating their payments.
Positive steps to overcome obstacles
One of the main obstacles ahead is the mammoth task of changing mindsets, a phenomenon that takes time and education. Citizens need to be taught how to download necessary applications on compatible smartphones, integrate their payment details accordingly and how to get their codes scanned by merchants. All this is simple for tech savvy millenials but not so much for the older generation that still depends largely on cash for transactions. The Infocomm Media Development Authority (IMDA) has launched a three-hour programme to assist seniors in learning how to process cashless payments to assist in this issue, aimed at educating those who haven’t adopted the technology to keep up with the times.
Vendors also need to be educated on the perks of adopting cashless options. The country has made great headway already, with plans for the technology to roll out to 120 hawker centres by the end of this year. Business owners seem to be on board with the new payment method, that will both save time as well as provide a hygienic alternative to having to handle money and wash their hands constantly before preparing meals.
This, however, is only the beginning of a long journey that will take time to implement nationwide.
Security a main concern
Industry experts are also extremely wary of QR code technology when it comes to security. There have been instances of fraud in China, for example, that question the safety of QR codes as a mode of payment. QR codes cannot be differentiated from one another when looked at with the naked eye – an issue that can cause problems in terms of security.
The industry, however, is making headway in this area, with QR codes being encrypted to guard against such scenarios and to protect consumers’ information. Users are often encouraged to scan QR codes with company – specific apps in order for them to work.
Just like any new tech that has been introduced into the mass market, it will require a healthy mix of governmental support and large players like financial institutions coming to the table with sufficient reasons to create an impetus for change. Our country’s QR code journey will take considerable time to reach China’s levels of adoption. With our nation’s pro business environment and focus on becoming a Smart Nation, we should get there in due time.