Building a seamless, safe and connected society
This goal is possible through a cashless ecosystem
Thanks to innovations focusing on the fintech sector, cashless payments have grown tremendously, faster than ever before.
The use of contactless credit cards, digital wallets, wearable technology and biometric authentication is fast becoming commonplace, embedded in our daily lives.
Singapore's vision for a Smart Nation-esque cashless ecosystem is close to being achieved.
With more start-ups and international research and development centres expanding their presence here, the city is well-placed to drive innovation with its digital savvy population, easy access to quality talent, pro-business policies and strong government support.
Government agencies, such as the Economic Development Board, have been crucial enablers in championing technological innovation and business growth.
Payment experiences are already being redefined to provide greater convenience, seamlessness and added security; helping to shape smarter and more inclusive societies.
Significant investments in the payments space have brought forth innovative solutions by financial institutions and start-ups - from contactless ATMs to withdrawing cash with the use of a smartphone to QR Codes as payment methods and humanoid robots with commerce applications.
Cashless payments we have experienced in Singapore today may not be a mirror of the status in the region, but what is important is that nations and citizens are recognising that building a cashless society is the way forward.Deborah Heng
While good payment infrastructure is crucial in driving acceptance, interoperability is also important to drive adoption of digital technologies.
The private and public sectors should collaborate to develop interoperable systems on a large scale, to better connect and incentivise users.
For example, in March this year, the Land Transport Authority and Transit Link launched the Account Based Ticketing system for transit.
Currently on a six-month pilot, commuters have the option to scan their Mastercard credit or debit cards to travel on public buses and trains, without the need to top up their fare cards.
Once scaled, this system will streamline the transit ticketing process, save time and ease traffic flow at MRT stations and buses, as commuters will no longer be stalled at the gantry due to insufficient funds on their travel card.
Eventually, the goal is to create an interoperable open loop system which will allow local commuters and even tourists to use their credit and debit cards for seamless travel around Singapore.
Such an initiative can accelerate change in consumers' behaviour to use the same contactless payments option across merchants in retail, F&B, grocery shopping and entertainment.
Familiarity leads to further trust in a contactless payments system that delivers the convenience and seamlessness that residents of a smart city value.
Another example would be digital wallets. According to our latest Mobile Shopping Survey, digital wallets have seen a significant uptake with a five-fold increase from four years ago.
Some digital wallets are interoperable payment solutions which allow users to make online and in-app payments, irrespective of the card platform.
The convenience of such unified payment interface delivers secure and frictionless commerce experiences for users, which can drive acceptance.
On the merchant front, the Government recently launched the SME Go Digital programme to encourage small and medium enterprises (SMEs) to start their journey towards digitalisation and encourage businesses to implement cashless technology.
Such programmes are a good start to help SMEs build stronger digital capabilities and better integrate within the larger ecosystem.
The advancement in cashless payments we have experienced in Singapore today may not be a mirror of the status in the region, but what is important is that nations and citizens are recognising that building a cashless society is the way forward.
Asia-Pacific offers a prime lens to understanding the different impact going cashless has on the diverse state of economies and countries.
For developed economies such as Singapore and Australia, a cashless society provides for a seamless payment experience. In emerging markets such as China, India and Indonesia, the adoption of digital payments opens a window for the underserved community to achieve financial progress.
The end goal is to create a safe and connected world, with globally interoperable payment systems.
The writer is country manager at Mastercard Singapore. This article was published in The Business Times on Tuesday.