Challenges ahead for businesses to embrace mobile payments in Singapore's Smart Nation vision - highlighted in PM's National Day Rally Speech

DBS Bank has started a contactless payment trial with Old Tea Hut, using a phone app called FasTrack. Queuing up time has been cut from 20 to six minutes. Photo: Ernest Chua

In late 2014, the Singapore government unveiled plans for Singapore to become a Smart Nation. This entailed harnessing the power of networks, data and info-comm technologies to create economic opportunities and build a closer community. Prime Minister Lee Hsien Loong, in his National Day Rally speech on Sunday (Aug 20), highlighted mobile payment to boost business. As Singapore ramps up plans to build a Smart Nation, the prospects for mobile payments companies like WeChat Pay, Alipay and Apple Pay appear to be bright. Mobile payments fit into the Smart Nation vision as it seeks to replace previous old and inefficient ways of making payments. However, there are still significant hurdles ahead for companies like WeChat Pay.

In China, even buying gao lak or chestnuts from a street vendor is done via e-payment methods such as WeChat Pay and AliPay. This is one area Singapore is lagging behind, PM Lee noted.

On the business side, companies that deal heavily with cash-only transactions will be affected the most by the transition into a Smart Nation. Small retailers and hawkers especially will face huge challenges in adopting the new cashless payment modes. Many cite the inconvenience and technological challenges of these payment modes. Further adding on to the problem is the fact that these retailers and hawkers require quick access to cash in order to pay their suppliers who usually accept only cash payments. While the benefits of using WeChat payment app are obvious – such as enabling a quicker and more efficient method of payment and providing a more secured system with lower transaction cost – the challenges remain for both authorities and companies alike to foster a more conducive business ecosystem that incentivises more retailers and hawkers into adopting mobile payments.

Helping businesses adopt mobile payments such as WeChat Pay and Alipay is only one side of the coin. Consumers also have to learn how to use the technology. A recent study by RFi Group found that 65% of Singaporeans chose to use cash for low value purchases and only 38% could imagine a cashless society here. The reasons that the study cited for the slow adoption of contactless payment include the difficulty of displacing credit cards as the de facto non-cash payment mode and how Singaporeans are already so accustomed to using cash or cards. Mr Lee also cited PayNow, a new service that allows people to pay and receive money using their mobile banking app. While comparing to WeChat Pay and Alipay, PayNow is more like a peer-to-peer fund transfer service, not really good enough for business to use for payment collcetion.

However, with Singapore’s push towards becoming a Smart Nation, it is clear that there will be more impetus towards adopting the mode of payment provided by WeChat Pay and Alipay. In the public transport industry, we see active steps being taken by the government to ease Singaporeans into adopting new technology. As expected, there will be resistance from certain segments of society . Just as other countries have experienced, the road to a cashless society will be a bumpy one, but the fruits of labour will be worth it in the end. FOMO Pay is well positioned to help both businesses and consumers adopt mobile payments such as WeChat Pay and Alipay. To learn more about the payment solutions that we provide, please visit our homepage.

To read more, Your face is your password in China, Straits Time

Cashless in Singapore: Going wallet-free for a weekend, ChannelNewsAsia

Going cashless in China - is Singapore ready?, Stuff

Read more at https://www.stuff.tv/sg/features/going-cashless-in-china-singapore-ready#7O2yMmpIJkfIKpWI.99 About FOMO Pay Pte. Ltd

FOMO Pay is an authorized partner of WeChat Pay, Alipay, UnionPay, Baidu Wallet & BestPay in Southeast Asia, and was selected as one of the Top 100 Asian Companies by E27, Top 100 Startups by Red Herring Asia, and Top 8 by DBS’ FinTech Accelerator Program, Top Fintech Startups in Singapore by Fintech Asia. FOMO Pay provides a one-stop solution for local merchants by facilitating payment collection from China market, including Chinese tourists. This comprises of online payment and in-store payment modes. FOMO Pay’s business solution serves clients from a wide range of industries, including the telecom, publishing, tourism and hospitality, F&B, education and retail industries.