đź’¸ Can pay liddat? No lah
The intricacies and current status of in-store payments in Singapore 🇸🇬
As a well-seasoned globetrotter, I felt like I was fully prepared to settle in my new home, the hyper-banked city-state of Singapore. Equipped with my Mastercard from bunq — a Dutch challenger bank — added to my Apple Pay and complemented by bunq’s partnership with Transferwise I was going to pay everywhere while flashing my phone and relishing the real exchange rate.
I was naive. That’s not what happened.
NETS only
Fintech is booming in Singapore. As a result, on a population of 5.6 million, there are 17 different ways of paying in-store. And I’m not even including good old cash or debit and credit cards. Yet, you can’t just pick one and stick with that.
You find QR codes and cash in hawker centers — the local food courts. You use the EZ-link card for public transport and perhaps convenience stores. And sure enough, you can often pay at businesses with card, but for some, this is NETS only.
I am, sorry. What the heck is NETS? And which NETS is it anyway? NETS FlashPay, NETSPay or NETS CashCard?
I was thoroughly confused.
Overview
I wanted to get to the bottom of this, so I amassed intelligence and created this overview in Notion of all payment options within Singapore. I excluded the usual suspects — cash and debit/credit cards — and focused on in-store purchases only. Lastly, I arbitrarily divided all those products into their types, methods, and technologies.
Type: QR codes
A quick count tells me there are about 12 apps that you can download in Singapore that’ll let you pay with a QR code. Most of the time, this necessitates topping-up your e-wallet, with residual money sitting idle. But with some products, it will automatically charge a registered card or even deduct directly from your bank account.
As a consequence of everybody and their mom pushing their own digital wallet (from telco companies to airlines and even gaming platforms!), QR-codes abounded. To curtail this, the MAS (Monetary Authority of Singapore), launched SGQR — a national QR code — in 2018. Hence, all QR payment options accepted by the merchant are now shown in one neat code to scan.
Type: Contactless
8 products out there use NFC (near-field communication) to let you buy that cup o’ joe. Most solutions are card or device based, where cards need to be topped-up and devices will charge bank cards directly. Some apps (from non-technology companies) will allow for contactless payments as well, through NFC and a virtual credit card.
Type: Peer-to-Peer transfer
Although this may not seem like an in-store payment type, there is a catch to it. Within 7 apps in Singapore, Peer-to-Peer (P2P) transfers can be used to pay back a family member or split the bill with friends. But even corporates, SMEs, and government agencies will accept P2P if they’re set up for it.
This innovation was introduced by the Association of Banks in Singapore through PayNow. You just select the company/person you wish to pay, by their mobile number or business/social identity number. That’s it.
Adoption and usage
The adoption of QR, Contactless, and P2P in Singapore is hard-fought. Many opinionators claim that these types of payment and their many different manifestations are confusing, insecure, and not user-friendly. Proponents, however, see regulations pushing the boundaries and cashless becoming the norm. The image below, presenting the results of the Future of Payments Study conducted by UnionPay International and Nielsen, clearly indicates the fragmented landscape in the use of all payment types.
E-Payments for Everyone
So what does the future look like?
It is clear that the Singaporean government will keep pushing for a cashless society, as e.g. portrayed in this keynote speech “E-Payments for Everyone”. Regarding which payment type will come out victoriously, it remains to be seen, since Singapore is really torn between the Chinese inspired QR-code rage and its foundation of a modern banking nation (and hence its penchant for contactless). It seems inevitable, however, that this crowded space will soon consolidate.
As for me, I am still convinced that paying contactless is much more frictionless than pulling up my QR-code app, even when tempted with an incentive of up to 30% cashback.
Michael is on a mission to deep dive into Singapore’s tech scene as quickly as humanly possible.
P.S. If you have any comments, corrections or commendations, leave them below!
And NETS?
So yeah, it’s basically a local debit card, deducting from your bank balance directly.
