E-payments, transactions the way forward for S’pore firms

SINGAPORE — The future of Singapore’s payment system lies in e-payments, Minister for Trade and Industry (Industry) S Iswaran indicated yesterday, as the Republic strives to make financial technology (fintech) a critical differentiator for its economy.

This is why the Government is supporting Singapore companies in the adoption of fintech, particularly e-payments, as this will help local businesses participate more actively in e-commerce, which has become pervasive in business-to-business and business-to-consumer transactions, said Mr Iswaran.

“E-payments confer on our SMEs — whether digital or traditional in their business model — significant productivity gains through the digitisation of business processes and greater efficiency of e-payments,” said Mr Iswaran in his speech at the Sim Kee Boon Institute annual conference at the Singapore Management University yesterday. The theme of the conference was fintech and financial inclusion.

“The digital economy in its broader sense is going to be a key feature of the way Singapore’s economy evolves and, beyond that, the way we integrate across the region. We want to facilitate the entry of our businesses into the space because that means they can scale up and access broad markets almost instantaneously.”

As such, the Government is helping SMEs digitise their existing business processes, such as paper invoice reconciliation, so they can fully benefit from e-payments. But recognising that such digitisation requires certain levels of investment that may not yield immediate dividends, the Government has financial schemes such as the Capability Development Grant, said Mr Iswaran, which SMEs can utilise to take on large-scale upgrading projects.

The inter-agency Electronic Payments Committee has also set up a taskforce to work closely with SMEs to better understand the hurdles to the digitisation of their business processes and integration with e-payments, he added.

The Government also hopes to take the lead in developing a regional e-payments strategy, so that companies can tap into the region’s growing middle class and large consumer base through e-commerce. This will be supported on two fronts: First, by helping local merchants establish strategic partnerships with major payment market players to reach out to Asean cities; and second, by supporting the development of payment solutions for the unbanked in the region.

Some local companies have already embarked on their fintech initiatives. DBS Bank, for example, rolled out its Digibank in India in April this year, a mobile-only bank service that uses a wide range of technology from biometrics to artificial intelligence. Customer authentication is done using the Aadhaar card, a biometrics-enabled ID.

At the conference yesterday, Mr Iswaran added that the Government continues to keep an eye on the future, and hinted at plans for the “next phase of development in Singapore’s payment landscape”. Mr Iswaran did not provide additional information, saying only that the central bank will provide further details at the two-day conference today.

“From alternative payment solutions to peer-to-peer lending, fintech has helped shape a more innovative and inclusive financial system. And I think, in the context of Asia, it has particular relevance and significance because when you consider the increasing dimension of fintech and the fact that it will make financial services more accessible, I think we can truly appreciate the potential. Fintech is a critical differentiator for Singapore to remain a leading financial hub in the region,” said Mr Iswaran.