While Singapore is technologically advanced in many ways, it is falling behind in others. This is according to Singapore’s prime minister, Lee Hsien Loong.
In an annual address last week, Lee named digital payments as one area where better use of information technology could improve the lives of Singaporeans.
“We have a natural advantage. We are compact. We are highly connected. Our people are digitally literate. Our schools are teaching students basic computing and robotics,” he said in the speech. “But while we have the right ingredients, we lag behind other cities in several areas. For example, electronic payments.”
He pointed to China’s embracing of digital payments in everyday life.
“So, when visitors from China find that they have to use cash here, they ask: how can Singapore be so backward?” he said.
To grow digital payments, Singapore needs to improve the experience, Lee said. Currently, consumers must carry multiple cards and merchants must support competing systems with multiple readers, resulting in cost and inconvenience.
He highlighted efforts from the Monetary Authority of Singapore – Singapore’s central bank – to simplify and integrate payments systems so they are interoperable and easy to use. These include the development of a unified POS terminal that can accept multiple payment types and the introduction of PayNow, which links consumers’ mobile phone numbers to their bank accounts, he said.
Where a government expresses an interest in its society’s transition to digital payments, can opportunity for payment facilitators, ISVs and other technology providers be far behind?
To be sure, government support has created openings elsewhere, most notably in India. That country’s push toward a digital economy as a policy priority has resulted in growth for the likes of leading payment facilitators Paytm and Mobikwik, although it’s too early to know what the long-term results will be.
Earlier this year, ride-hailing app Grab predicted that Singapore would soon become the largest market for GrabPay, its digital payments platform.
And Alipay, a payment facilitator and dominant mobile payments provider in China, just this week said that it had entered into a partnership with Singapore-based CCPay to increase Alipay acceptance points within Singapore.
At this time, the service is reportedly limited to Chinese Alipay users who are visiting Singapore, but the company plans to eventually open the platform to Singapore users as well, according to a report in The Straits Times.