We can certainly empathise with some older, less tech-savvy individuals when they do not have an alternative to e-payments. Bewildered by the plethora of e-payment options displayed at the counter, each represented by a fancy logo of its own, their instinct of simply pulling out banknotes and coins is understandable.

At one count in December 2018, there were no fewer than 42 mobile payment players active in Singapore. Ranging from local bank options such as DBS PayLah! and those linked to mobile devices like Apple Pay and Samsung Pay to overseas e-wallets like Alipay and WeChat Pay, there has probably never been such a wide array of choices in the history of payments.

Having a multiplicity of choices is good for competition, but not when it creates a disincentive towards wider cashless payment adoption. Anecdotal evidence suggests that a segment of the population is not even able to distinguish between payment systems such as PayNow and digital wallets for practical purposes, let alone become avid users of cashless payments.

Just as the previous articles in this series have done, we probe into the hype of cashless payments to unearth the real issues that need to be dealt with. The aim, though, is not to dissuade users from the cashless revolution, which presents itself as an inexorable trend. (Parts 1 and 2 of this article were published in the June and July issues of this IS Chartered Accountant Journal.)

Much still needs to be done to alert and educate consumers and businesses to the implications of e-payment, so that they can better understand and prepare for the future cashless economy. The use of cash is on the decline in every region of the world; Worldpay’s 2018 Global Payments Report projected that cash, which was still the leading point of sale payment method in 2018, will soon fall to fourth place in 2022, behind debit cards, credit cards, and e-wallets.

Having a multiplicity of choices is good for competition, but not when it creates a disincentive towards wider cashless payment adoption.


It is not new for financial services enterprises to compete in the payments market, and this has led to a proliferation in the number of options for making payments. The credit card market of the past 70 years is not unlike what we see in the e-payments landscape today. The fact that Visa and Mastercard had been overwhelmingly dominating the credit card market – at about 53% of market share in the US for Visa last year, and 22% for Mastercard – did not happen by chance. They have continued their dominance even with the disruption posed by mobile payments in the past decade, not least because of how aggressively they have fought to keep themselves relevant; one example is allowing users of payment apps such as PayPal to add credit cards to their accounts.

But the current payments revolution at hand, which should perhaps be more clearly defined as a mobile payments revolution, is growing more exponentially than before due to the high penetration rate of smartphones around the world, coupled with how technology today has lowered the barriers of entry for a payments business; one no longer needs to be a Bank of America, which started Visa credit cards, nor the Interbank Card Association, which started Mastercard.


Whatever the inconveniences of having a multiplicity of e-payment options, there are clear benefits for merchants.

While credit card companies tend to charge merchants a transaction fee of around 3%, QR code payments charge 1%, and sometimes even less. And instead of merchants having to spend $270 to set up a credit card terminal, which could be considerable for micro-business owners such as hawkers, the cost of producing or printing a QR code label is effectively just $0.20.


For sure, there are clear benefits of mobile payment options even for less tech-savvy consumers. The much shorter time needed to wave a contactless card or scan a QR code, compared to the time needed for a credit card machine to dial up or for cash to be counted, comes to mind. But there are also undeniable inefficiencies in mobile payment methods.

It is not untypical for consumers to hold three or more e-wallets, since each offers deals and rewards in different areas, from transport to shopping mall expenditures. Each of these wallets would have to be topped up separately, and they would likely have different top-up and refund mechanisms that can add to potential confusion. They may each hold small amounts of money, but when added together, the e-wallets could contain more money than what consumers keep in one physical wallet.

Imagine how much more frustrating it could be for the merchant who would have to deal with different acquirers which send them settlement files on different days, perhaps in different file formats too, and then pay the merchant on different days. All these complexities would be easily compounded if we are talking about consumers potentially holding 42 different e-wallets and payment methods, with merchants having to deal with 42 different payment providers.

But Singapore has not had to grapple with this, thanks to the action between Monetary Authority of Singapore (MAS) and the industry thus far. In 2016, a report by KPMG on the payments ecosystem in Singapore, commissioned by MAS, identified the lack of interoperability between payment systems as one of the critical issues that could hamper Singapore’s Smart Nation ambitions.

Around five years ago, MAS began to realise that a growing number of merchants used more than one payment terminal, provided by different bank acquirers. This presented obvious costs and inefficiencies when cashiers had to be trained to use different terminals, and customers were confused as to which terminal their card should use. In 2017, the roll-out of Unified Points of Sale (UPOS) terminals started in earnest in Singapore, beginning with supermarkets, convenience stores and petrol stations.

In September 2018, the Singapore Quick Response (SGQR) code, the world’s first unified payment QR code that is compatible with 27 e-payment solutions, was launched. The SGQR code facilitates the creation of a single multi-tenanted QR for each merchant, supported by a central infrastructure. This means merchants would no longer have to display multiple QR code stickers.

The UPOS and SGQR initiatives were the result of collaboration between MAS and industry partners. As cashless payment solutions continue to grow in number though, MAS recognises that it needs to be on top of developments to pre-empt future problems of interoperability.

In a speech at the Central Bank Payments Conference in Singapore on 26 June 2018, Jacqueline Loh, Deputy Managing Director, MAS, said, “Today, we have existing powers to require payment platforms to open access to participants. Looking ahead, we recognised that we needed two more measures: to require participants to use a common platform and to adopt common standards (such as SGQR).”


There are also other issues that need to be addressed besides those brought about by the multiplicity of e-payment options. For instance, as more payment transactions take place outside of the banking system, they also start to fall outside central bank oversight like the Automated Clearing House and the Real-Time Gross Settlement system. And while interoperability between e-payment systems within Singapore is now well-managed, how can they be kept interoperable with other e-payment systems around the world?

MAS is already addressing some of these other concerns in the Payment Services Bill, which was passed in Parliament earlier this January, and will no doubt continue to do so.

But if there is one takeaway from this article, it is that in the quest for a cashless society, we should not sweep aside any concerns, even if they relate to the seemingly mundane concerns of consumers and merchants arising from the multiplicity of e-payment options.

It is futile and counterproductive to keep spotlighting the elderly, the less tech-savvy, or indeed anyone at all, for their inertia towards embracing cashless payments, as some have been doing. Some of these concerns are real and should not be put down as an inexplicable penchant for banknotes and coins. Authorities and the industry have a critical role to play too, as the examples of the UPOS and SGQR initiatives attest to. Only then can the full extent of Singapore’s Smart Nation ambitions be realised.

Loke Hoe Yeong was Manager, Insights & Publications, ISCA. He has since left the Institute.