Looking at the public outcry over the SimplyGo Ez-link transit card this week, one can easily forget what’s been ailing Singapore’s contactless card payments market over the years and overlook the many missed opportunities. 

While the far-sighted impetus to introduce certain new technologies is understandable, their implementation has sometimes left users feeling confused, inconvenienced and let down.

Many have asked: Why can’t Singapore’s contactless cards be as convenient and efficient as, say, Japan’s integrated circuit (IC) cards? You know, those handy Suica or Pasmo cards you tap to pass through Tokyo subway gantries and also to pay for a bowl of ramen after getting out of the station?

Ironically, Singapore’s old Ez-link contactless cards had from 2002 to 2009 used the same Sony FeliCa technology, which included a secure chip embedded in the cards. The Octopus card in Hong Kong also uses the same tech.

Initially made for transit, this technology is fast. For millions of commuters every day, a train station gantry is expected to open in milliseconds after they tap a card on it.

So, why hasn’t Singapore’s Ez-link card been as widely used here as its counterparts in Japan or Hong Kong? 

The answer is fragmentation. 

THE PROBLEM OF FRAGMENTATION

Back then, the company Nets, which is owned by major banks in Singapore, already had a stored-value card that was used mainly by drivers to pay road tolls.

Unsurprisingly, they also wanted to get into the contactless card game. The prize was similar to both backers of Ez-link and the Nets CashCard — a cut of the spending you’d make on these stored-value cards.

The problem was these two cards were not interchangeable: Some shops near train stations might accept an Ez-link card, but other retailers might only take your CashCard. Who wants to carry so many cards?

In a bid to harmonise everything, the Government in the 2000s decided to come up with a local standard called Cepas. Dumping the FeliCa chip in 2009, it aimed to make future contactless cards from both Nets and Ez-link compatible.

In other words, one could use an Ez-link card to pay for Electronic Road Pricing charges, or a CashCard to take a train. Despite small issues — like some car parks not accepting the new cards — Cepas worked.

However, this didn’t solve the problem of fragmentation. Since both Nets and Ez-Link had wasted the years-long head start they had in the market, many other players muscled in.

Soon, credit card companies were offering contactless payment at cafes, supermarkets and other retail joints, essentially negating the need for a CashCard or Ez-link card. In no time, Singaporeans got used to waving a credit card at cashiers.

At the same time, mobile phones became more secure and able to safely keep sensitive data such as your card information onboard.

These gadgets would become e-wallets, through apps such as Apple Pay or Google Pay/Wallet. Why bother with a contactless card unless you need it to pay for road toll or train rides?

And that is where we are today. Essentially, the SimplyGo Ez-link system works in a similar way to your credit card or e-wallet apps.

It uses a standard created by EMVCo, a group of credit card companies including Visa, Mastercard, American Express and others.

COMMUTER CONCERNS

One important departure from past contactless cards: Unlike before, the new SimplyGo Ez-link card doesn’t keep onboard important information such as the balance amount on it. 

That information, like a person’s bank or credit card account, is stored online. To fetch it and display it on a gantry takes a few seconds — too much of a wait at peak hour.

On the flip side, the new system adds flexibility — one can remotely top up the card via an app, or even cancel it if the physical card is misplaced.

Plus, this opens up a lot more payment options. Commuters can already use their credit card or phone wallet (tied to a credit card) to pay for trips — no more paying a deposit for a stored-value card that expires every few years.

However, as many have pointed out, the new system has a critical issue: It doesn’t show on the large screen at the gantry how much credit is left on a SimplyGo Ez-link card.

This may seem a small matter to the authorities, which probably assumed that people would check later either at the station or through an app, but clearly they had underestimated commuters’ wish for a receipt. People want to feel they are in control, not at risk of being overcharged.

With SimplyGo, the authorities have chosen a more flexible technology that is future-ready — but perhaps they should have spent more time managing the transition and explaining their decisions to the public.

Could Singapore have taken a different route, like in Japan, to make such payments more common? It’s hard because of some enduring issues, including fragmentation and a small market.

Note that Japan has stuck to its FeliCa technology instead of a similar account-based technology that Singapore has gone with. How is it, then, that Japanese users can tap their phones at a gantry to get out? 

That’s because most Japanese phones come with a FeliCa chip, which is similar to having a physical contactless card on your phone. Integration is key here.

THE COST OF EASY PAYMENTS

In recent years, the FeliCa standard has also been opened up to some international users, in particular, Apple iPhone owners who can now pay with their phones when visiting Japan.

So, the technology is evolving to find a space not just in stored-value cards but more mobile devices, including those sold outside of Japan. This is now possible so long as there is a “secure element” — like a virtual vault — in a phone that meets the Japanese requirements.

Why can’t Singapore have this? 

For one, the market is too small to mandate that phone makers add a smart chip in all the models shipped here.

It’s not for want of trying, though. Just a few years ago, Singapore tried out an advanced SIM card that acted like a stored-value chip on a phone — similar to what’s used in Japan’s FeliCa.

Unfortunately, that has hardly taken off. To change to this near-field communication SIM card that held a virtual Ez-link card in it, telecommunications operators would charge a fee of more than S$30, plus an activation cost.

The app interface for that was also a little basic. Without critical mass behind it, who wanted to spend time developing software for it?

The latest woes with SimplyGo Ez-link are yet another reminder why contactless card payments have been such a downer in Singapore, even as they have taken off elsewhere.

Thanks to a fragmented market early on with Nets and Ez-link, the country didn’t take advantage of the head start that it had from adopting the right technologies decades ago.

And having failed to ignite any mass adoption outside of transit, as done in other cities, the authorities now find themselves compelled to turn to a more flexible system that opens up new payment options.

The downside, as is clear this past week, is that consumers have been asked to switch to a new system while important issues remain.

Could the authorities have let the existing cards expire before deciding to shut down the old system, which has run alongside this SimplyGo one since 2019? And how is it that concession cards used by students and seniors don’t need changing out?

Commuters will need good answers to be won over. 

ABOUT THE AUTHOR:

Alfred Siew is the editor of Techgoondu.com, where a version of this article first appeared. He has covered the telecoms, media and technology scene for more than 20 years.