This article has been produced with Holborn Law, which operates in association with CMS.
As Singapore moves towards a Smart Nation and a cashless society, our electronic payments system has also developed to allow consumers to send and receive money easily. The most recent development in this journey is PayNow, which allows bank customers to transfer funds using only the recipient’s mobile number or Singapore NRIC/FIN.
Technology has transformed the way Singaporeans use financial services, and surveys show that 94% of Singaporeans have used mobile and internet banking to access their bank accounts. In addition, one in five consumers in South-East Asia use digital wallets, with Singapore being the top adopter in the region.
Electronic payments are becoming more common, and Unified Point-of-Sale (UPOS) terminals are being used at major supermarkets across Singapore. Even traditionally cash-based hawker centres are catching up to this trend, and some are undergoing a trial to accept contactless cards or QR codes which customers can scan with their phones to make payments.
MAS is also reviewing the regulatory framework for payments, and it recently proposed an activity-based regulatory regime for payments that will align requirements to the specific payment activities undertaken by businesses. It will be interesting to see how new developments such as PayNow will shape the industry feedback MAS receives on this proposal as well as the second round of public consultation.
In addition, stakeholders in the payments ecosystem also have the opportunity to chart Singapore’s epayments journey, as MAS has also established a Payments Council under its leadership, which will function as a forum for the payments industry and businesses to discuss payment strategies and cross-cutting issues, and promote inter-operable payment solutions.
With the recent launch of PayNow, transferring funds is not only fast and secure, but also convenient and efficient. PayNow rides on existing infrastructure used by Fast and Secure Transfers (FAST), which allows customers of 19 participating banks to make interbank fund transfers almost immediately and at no cost.
Before PayNow, under FAST, transferring funds was almost immediate, but transferors need to know the recipient’s bank and account number. There is also no need for PayNow users to have a mobile wallet, which is required by existing solutions such as DBS’ PayLah!.
Looking ahead, PayNow will soon also be introduced for transactions between individuals and businesses, and there is also potential for it to be implemented across South-East Asia. Making payments convenient, fast and secure is a key component in Singapore’s goal to become a Smart Nation, and PayNow is a step in the right direction. We are hopeful that the uptake of PayNow will be swift amongst Singaporeans, and that there will be continued innovations in the payments space in the near future.