PAYNOW Corporate - the e-payment service for businesses which will be launched on Monday - is said to be a game-changer in Singapore's push towards a unified e-payments system and cashless society. In line with that, participating banks have reported strong interest for the service among businesses here.
Brian Thung, Asean financial services leader at EY, told The Business Times: "PayNow Corporate is a game-changer in establishing Singapore as a smart financial centre as it brings convenience and cost benefits to both merchants and consumers."
He said that the service offers a "great" value proposition for small and medium enterprises (SMEs) and merchants as they can now receive payments at "reasonable costs in real-time". Currently, most merchants have to pay a 2-4 per cent fee for collecting real-time payments, or use cheques, which is a "slow and expensive" process, said Mr Thung.
The three local banks on Friday shared that nearly all of their new customers have signed up for PayNow Corporate. OCBC said that nine in 10 new customers to the bank have pre-registered for the service since April, while DBS said that "close to 100 per cent" of new customers have signed up since June.
Related story: PayNow Corporate launched on August 13
DBS also announced on Friday that it will be waiving all "inward" PayNow fees for SMEs and corporates from Aug 13, 2018 to Dec 31, 2019. DBS said it expects to register more than 50,000 SMEs by end-
2019, and that fees on more than one million "inward" PayNow Corporate transactions will be waived in the next 18 months.
UOB told BT that it will enable its clients to sign up easily for PayNow Corporate through its Business Internet Banking service and at its branches. UOB said it also plans to include PayNow Corporate as part of a "bundled cash management solution" to help businesses manage their finances more efficiently.
PayNow is a peer-to-peer funds transfer service that lets customers of participating banks instantly send and receive money using just their mobile number or NRIC. In April, the Association of Banks in Singapore (ABS) said that two more banks - Bank of China, and Industrial and Commercial Bank of China - would offer PayNow, bringing the total number of participating banks to nine.
PayNow Corporate, which allows businesses and the Singapore government to instantly pay and receive money using the organisation's Unique Entity Number (UEN), will be available from 8am on Monday. PayNow QR will also be launched in conjunction with PayNow Corporate to enable consumers and businesses to scan the merchant QR code in invoices or websites to make payments.
Priscilla Soh, head of transaction banking for Singapore at Standard Chartered Bank, said that the bank has seen "strong interest" for PayNow Corporate from companies in various sectors, including airlines, logistics and charity. iFAST Financial, for instance, has partnered Standard Chartered to allow customers to fund their investment accounts using iFAST's UEN PayNow ID.
Ms Soh said: "PayNow is viewed as a superior alternative to traditional cash and cheque payments, making sales and settlement a frictionless experience. This translates to a shorter receivable cycle, enhanced operational efficiency, and greater visibility of business operations."
DBS has also seen "widespread interest" in PayNow Corporate among its clients, including government clients such as Singapore Land Authority, insurance companies such as AIG, as well as retailers and F&B (food and beverage) chains, according to Jasmin Ng, managing director for group transaction services at DBS Bank.
OCBC, too, has worked with government organisations to implement PayNow Corporate, among them the CPF Board. As at June 30 (just three months after eligible CPF members aged 55 and above could withdraw their CPF savings via PayNow), some 4,000 withdrawals - totalling over S$40 million - have been made through the service, said OCBC.
Adrian Ong, managing director and head of cash management sales for group transaction banking at UOB, told BT: "The inclusion of businesses to PayNow is an important industry development, completing the e-payment ecosystem where consumers and businesses can pay one another electronically in a simple and cost-effective manner."
Melvyn Low, head of global transaction banking at OCBC, said: "Singapore's e-payments journey so far has been focused on the consumer, providing them with the tools to make e-payments and educating them about the benefits. But for e-payments to be pervasive, the next big step has to come from businesses."
According to a recent OCBC poll of 200 SMEs, more than 40 per cent of SMEs that have not signed up for PayNow said that they were interested in the service, but were just taking a wait-and-see approach. More than a quarter of these SMEs also said that they feel PayNow would be useful or very useful to their businesses.
EY's Mr Thung told BT that today, two key challenges exist for PayNow Corporate: interoperability, as there are currently multiple e-payment platforms and fragmentation; and adoption, as cash remains easy to use, and is relatively inexpensive and widespread.
"Going forward, to further accelerate the adoption of e-payments like PayNow Corporate across the region, driving regional interoperability is crucial. For example, Singapore and Thailand have embarked on connecting PayNow and PromptPay, the two respective national digital payment systems. With that, businesses and residents in both countries can use their mobile numbers to transfer money instantly and securely, boosting efficiency and minimising the cost of cross-border payments."
OCBC's survey also found that two in three SMEs in Singapore are likely to go cashless - which includes doing away with the use of cheques - by 2023. In fact, more than 45 per cent of the respondents said that they are likely to go cashless by as early as 2020, the survey found. "The nation is likely to hit its targets - perhaps even ahead of schedule," said OCBC.
The goal is for Singapore to be cheque-free by 2025, and to have ATM cash withdrawals at 20 per cent of the transaction value of e-payments by 2020, said Ong Ye Kung, Minister for Education and board member of the Monetary Authority of Singapore, at the recent 45th dinner of ABS.
Said OCBC: "The impending launch of PayNow for businesses is integral to meeting these goals."