How Con­sumers and Busi­nesses Make Pay­ments

HWM (Singapore) - - FEATURE -

Cur­rently, cash­less mo­bile pay­ment has caught the at­ten­tion of gov­ern­ments and un­re­lated busi­nesses. Dur­ing its Na­tional Day Rally in Au­gust, the Sin­ga­pore Govern­ment posited China as a role model for cre­at­ing a fluid smart­phone e-pay­ments ecosys­tem. It was easy to see why – China man­aged to see var­i­ous e-pay­ment meth­ods take of with­out mas­sive par­tic­i­pa­tion from their au­thor­i­ties. This prompted Sin­ga­porean CEO of Razer, Tan Min-Liang, to draft a pro­posal for a na­tion­wide e-pay­ment so­lu­tion.

Iron­i­cally enough, the pro­posal threw the ball back into the Sin­ga­pore Govern­ment’s court – by stat­ing that the Mon­e­tary Au­thor­ity of Sin­ga­pore (MAS) should look into a com­mon e-pay­ment frame­work that’s neu­trally man­aged by the au­thor­i­ties.

It’s quite plain to see that Sin­ga­pore isn’t quite ready for the new age of e-pay­ments, but we’re get­ting there. Now, there’s PayNow, where cit­i­zens of Sin­ga­pore merely need the mo­bile or NRIC iden­ti­fi­ca­tion num­ber of their peers to trans­fer cash be­tween friends at no ex­tra charge.

Where the money’s at

So why is there a push for more con­ve­nient e-pay­ment op­tions when the ex­ist­ing ones are suf­fi­cient and en­trenched into our life­style? To un­der­stand that, we have to think out­side of our re­gional bor­ders.

Ear­lier in Au­gust this year, Ali­pay an­nounced that they chose to part­ner with a rel­a­tively new and un­known n-tech ser­vice provider in Sin­ga­pore called CCPay. This col­lab­o­ra­tion will in­crease the num­ber of Ali­pay-ready ter­mi­nals around fa­mous tourist traps, such as Chi­na­town and Peo­ple’s Park Com­plex. It pro­vides more con­ve­nience to ex­pat Chi­nese work­ers re­sid­ing here as well, since they can spend di­rectly from their home­land’s bank ac­counts, on top of au­to­matic cur­rency con­ver­sion ser­vices when­ever you make a pay­ment via Ali­pay in Sin­ga­pore.

While it may seem un­re­lat­able to res­i­dents within the SEA re­gion, mak­ing Sin­ga­pore a prom­i­nent venue for Chi­nese tourists to spend cash­lessly at is a strate­gic move to gen­er­ate more rev­enue for lo­cal busi­nesses. The coun­try is in a com­pet­i­tive land­scape where her neigh­bors can oZer cheaper shop­ping with a broader va­ri­ety of goods and ser­vices.

The Sin­ga­pore Tourism Board stated that 2016 saw a to­tal of 2.86 mil­lion visitors from China – it would be silly to not ‘help’ these peo­ple spend their money since Ali­pay saw US$1.7 tril­lion (~S$2.29 tril­lion) trans­acted via the ser­vice in just 2016 alone.

In the case of Ali­pay and CCPay’s part­ner­ship, the lo­cal startup will help the Chi­nese rm han­dle all Ali­pay trans­ac­tions in Sin­ga­pore. In re­turn, CCPay gets to charge a ser­vice fee, and Ali­pay can get a cut from it. All costs – such as cur­rency con­ver­sion – are borne by the shop­pers. It’s an or­derly ar­range­ment for Sin­ga­pore, who didn’t have to lift a nger to be a part of this scheme.

That’s not to say that SEA is idle in the cash­less land­scape – across the Cause­way, we have WeChat Pay work­ing on cross­bor­der li­cens­ing, which would al­low Ten­cent’s e-pay­ments

sys­tem to op­er­ate seam­lessly in Malaysia. WeChat al­ready has that li­cense and a non-Chi­nese Yuan app in Hong Kong. Ten­cent said that WeChat Pay could also be found in 13 mar­kets out­side of China, with 10 cur­ren­cies sup­ported.

To­gether with Ali­pay, these two Chi­nese e-pay­ment rms see CNY18.8 tril­lion (S$3.826 tril­lion) worth of trans­ac­tions in just the rst three months of 2017. With that, it’s im­me­di­ately ap­par­ent why mo­bile e-pay­ments is a must for South­east Asia – al­most no­body says no to more money.

But is it re­ally safe?

With all the ben­e­fits we’ve pre­sented thus far, you must be won­der­ing: What’s the catch? Well, how about the ob­vi­ous con­cerns about safety to start? Ev­ery­body we’ve spo­ken to for this story from ser­vice providers (like Grab and Liq­uid­pay) to the banks (like DBS) to even Govern­ment au­thor­i­ties (like MAS) has re­it­er­ated that mo­bile pay­ments are safe - safer than credit cards or even cash in fact. They point to how ac­cess to the app is se­cured be­hind your mo­bile phone’s se­cu­rity, whether it be bio­met­ric or a six digit pin, and say that there is al­ways re­course for ac­tion as mo­bile pay­ments are con­sider di­rect funds trans­fers and so are safe­guarded by the same laws.

The ad­vice given from The As­so­ci­a­tion of Banks in Sin­ga­pore (ABS) is to con­tact the per­son to re­quest he send it back to you as it was sent in er­ror and to re­mind him that us­ing money that does not be­long to him is a crim­i­nal of­fence un­der the Pe­nal code (in Sin­ga­pore). Pre­sum­ably, that gives you room for le­gal re­course - at least, if you’re in Sin­ga­pore.

But some­how, that still isn’t the most re­as­sur­ing an­swer. Af­ter all, Sal­vador Men­doza al­ready demon­strated a num­ber of at­tacks tar­get­ing Sam­sung Pay at Defcon last year, and the hack­ers of Ger­many’s Chaos Com­puter Club demon­strated in 2013 that even Ap­ple’s vaunted Touch ID can be hacked if peo­ple with enough in­tent put their minds to it.

In Sin­ga­pore, there’s been a case of a con­sumer who had his credit card de­tails stolen from his smart­phone. Six ight tick­ets worth a to­tal of $12,327 were pur­chased, and yet his bank is re­fus­ing to waive the charges and in­sist­ing he pay a low­ered sum of $5,000 as they claim their se­cu­rity sys­tem was never com­pro­mised. Ob­vi­ously the hack­ers man­aged to ob­tain the two-fac­tor au­then­ti­ca­tion codes some­how, but this just goes to show that all of us need to be vig­i­lant with ev­ery trans­ac­tion.

The low thresh­old set for mo­bile pay­ments may also work in fa­vor of the per­pe­tra­tors as mul­ti­ple small trans­ac­tions are def­i­nitely harder to track than sin­gle large ones.

Given how at­tached we are to our smart­phones these days, it’s easy to see some­one wait­ing at least half a day to see if it isn’t picked up. In that time, mul­ti­ple quick trans­ac­tions could be made - pick­ing up ve Ap­ple Store gift cards from a con­ve­nience store and then run­ning over to the next one for ex­am­ple - be­fore the thief dis­poses of the phone. As long as you have ac­cess to the mo­bile phone and the pay­ment so­lu­tion, no one thinks twice. That’s the beauty and the dan­ger of mo­bile pay­ment.

Un­til the day we can truly se­cure our smart­phones (or de­ac­ti­vate them in­stantly with­out re­morse), we’d say the best way to pay is sim­ply to con­tinue to have mul­ti­ple ways. Gov­ern­ments and re­tail­ers will just have to ac­co­mo­date.

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