The general public is used to paying in cash. They think that it is the "best way" to make payments. The hawkers and merchants also think the same.
If this is the case, why did China move towards e-payments using AliPay and Wechat Pay?
I can tell you that the people in China are not stupid. They know that e-payments save them time in counting money, giving change, banking in the money, etc.
The time saved means more time for business. They do not mind paying a small fee for e-payment as it is small relative to the business that they can do with the extra time.
Our merchants are concerned about the cost of setting up the infrastructure for e-payment, the fee that they have to pay and the delay in receiving their money.
These are valid concerns, but they refer to the old e-payment system using NETS.
The new payment system using e-wallents (similar to AliPay and Wechat Pay) do not have these issues. If ou have used DBS PayLah or similar wallets issued by OCBC and UOB, you will know what I mean.
The e-payments using the e-wallets have these advantages:
a) There is no need to incure any infrastructure cost for merchants and hawkers. They only need to use their mobile phone with access to free wifi or a data plan. Most of them already have it.
b) There is no fee payable for the e-payment transfers. It is free for the time being.
c) They get their money in their e-wallet immediately. They can transfer it to their bank account free.
The only problem is that there are too many platforms (i.e DBS, OCBC, UOB, Grab, NETS, Apple, Android, etc).
This problem can be addressed by setting up a clearning house, as explained here:
http://www.tankinlian.com/ArticleDisplay.aspx?ID=1445
The clearing house has to be set up by MAS or the Association of Banks or by a party approved by MAS.
If we have a clearing house, we can make e-payment successful in Singapore.
Do not get the misunderstanding that e-payment is exclusive. Cash payments will continue to be allowed (as in China) but, over time, more customers will prefer to pay through e-wallets.
Tan Kin Lian
If this is the case, why did China move towards e-payments using AliPay and Wechat Pay?
I can tell you that the people in China are not stupid. They know that e-payments save them time in counting money, giving change, banking in the money, etc.
The time saved means more time for business. They do not mind paying a small fee for e-payment as it is small relative to the business that they can do with the extra time.
Our merchants are concerned about the cost of setting up the infrastructure for e-payment, the fee that they have to pay and the delay in receiving their money.
These are valid concerns, but they refer to the old e-payment system using NETS.
The new payment system using e-wallents (similar to AliPay and Wechat Pay) do not have these issues. If ou have used DBS PayLah or similar wallets issued by OCBC and UOB, you will know what I mean.
The e-payments using the e-wallets have these advantages:
a) There is no need to incure any infrastructure cost for merchants and hawkers. They only need to use their mobile phone with access to free wifi or a data plan. Most of them already have it.
b) There is no fee payable for the e-payment transfers. It is free for the time being.
c) They get their money in their e-wallet immediately. They can transfer it to their bank account free.
The only problem is that there are too many platforms (i.e DBS, OCBC, UOB, Grab, NETS, Apple, Android, etc).
This problem can be addressed by setting up a clearning house, as explained here:
http://www.tankinlian.com/ArticleDisplay.aspx?ID=1445
The clearing house has to be set up by MAS or the Association of Banks or by a party approved by MAS.
If we have a clearing house, we can make e-payment successful in Singapore.
Do not get the misunderstanding that e-payment is exclusive. Cash payments will continue to be allowed (as in China) but, over time, more customers will prefer to pay through e-wallets.
Tan Kin Lian
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