23 November 17 The Business Times by JACQUELYN CHEOK
NETS - the payment services group owned by DBS Bank, OCBC Bank and United Overseas Bank - said on Monday that it will invest more than S$30 million to launch a unified e-payments platform in Singapore. This is a milestone in the country's pursuit of a cashless society, and represents a home run for Nets if the home-grown company delivers on its plans.
Why is that? First, Nets' investment plans will be supported by DBS, OCBC and UOB - the three local banks that each owns a third of Nets. Second, its plans include expanding an interoperable QR code cashless payment system to more than 100,000 acceptance points at 37,000 merchants nationwide, and extending this service to customers of seven major banks here.
Having the support of Singapore's big three banks means that Nets can build a platform which is bank-agnostic and therefore accessible by all banked consumers in Singapore. Nets will also enjoy the technological expertise as well as the enterprise and consumer outreach of the three banks, and can then focus on creating an overarching, ubiquitous e-payments system.
For a long time, the e-payments landscape in Singapore has been described as fragmented, with multiple players - banks, telcos, fintech startups - offering myriad solutions. This has led to confusion among both merchants and consumers, and more visibly, clutter in the form of point-of-sale terminals and QR code stickers at check-out counters.
With Nets QR, merchants need to display only one single QR code sticker at their counters. To make payment, customers simply launch their respective bank's e-payment app or NetsPay (Nets' e-payment app), scan the QR code and enter the payable amount. The seven banks are DBS, OCBC, UOB, HSBC, Maybank, Standard Chartered Bank and Citibank.
Secondly, Nets' over-100,000 acceptance points at 37,000 merchants constitute the largest payments network in Singapore. In comparison, Singtel's e-payment service Dash is available at over 50,000 places including 7-Eleven, Food Republic and Comfort and CityCab taxis, while Grab's GrabPay is targeting to have onboard 1,000 merchants by end-2017.
Notably, Grab's recent roll-out of GrabPay to merchants can be a canny move for the Singapore-based ridesharing company, which has said that it wants to evolve into a "consumer platform" offering more than just on-demand transport services. But it might take some time for Grab to acquire a sizeable pool of merchants for its e-payments solution, as has Nets.
To boot, Nets will waive all terminal and transaction fees for hawkers for three years. It will also work to accelerate the settlement process to allow merchants to receive their sale proceeds on the same day. (Currently, Nets offers a settlement period of up to a day after the transaction date.) Both measures will boost merchant adoption of Nets QR.
The lag in merchant adoption has been said to be a key obstacle in Singapore's cashless drive. So unless the other e-payments players are able to offer the same amount of subsidies to onboard merchants, Nets is the front runner to lead the nation's efforts towards a cashless future. Plus, it has become a household name among consumers and an integral part of daily life in Singapore.
Nets chief Jeffrey Goh believes that the service, having been around for 32 years, is at the forefront of cashless payments here. He said: "We're not being arrogant. Over the past three decades, we've worked tirelessly to build the hardware - the infrastructure necessary to achieve an e-payments society."
Singapore's cashless aspirations are clear. Prime Minister Lee Hsien Loong has on more than one occasion urged the Republic to enhance its e-payments system and learn from countries such as China, which he believes boasts the "most sophisticated and commonly adopted" e-payment systems in the world. "If they can do it, so can we," Mr Lee said.
The next step for Nets will be to embed Nets QR onto SG QR, the common Singapore Quick Response Code (SG QR) that will be rolled out and adopted by payment service providers in Singapore in 2018. This new payment protocol - the first of its kind globally - can accept e-payments by both domestic and international payment schemes, e-wallets and banks.
Until then, Nets has the grand task of building and expanding the unified e-payments platform infrastructure across the country, and of changing consumer behaviour by educating consumers on the benefits of going cashless. If Nets delivers on that mission, the Singapore company would have scored a home run.