Singapore's PayNow Corporate set to gain steam among businesses supporting cashless drive

PayNow Corporate will be available to businesses and corporate customers of seven participating banks – Citibank, DBS Bank/POSB, HSBC, Maybank, OCBC Bank, Standard Chartered Bank and United Overseas Bank (UOB). — TODAY pic
PayNow Corporate will be available to businesses and corporate customers of seven participating banks – Citibank, DBS Bank/POSB, HSBC, Maybank, OCBC Bank, Standard Chartered Bank and United Overseas Bank (UOB). — TODAY pic

SINGAPORE, Aug 13 — Customers picking up a burrito from popular food kiosk Stuff’d will soon be able to pay for it using PayNow on their smartphones.

From this morning, the PayNow Corporate service will go ‘live’, meaning consumers can make purchases at retail shops and food and beverage outlets by scanning a QR code on their phones, or entering the establishment’s unique entity number to make a transfer.

Stuff’d is one of the firms that has signed up for the service, and the eatery is in the process of rolling it out.

In a media release last Friday, DBS said that it was expecting some 50,000 small- and medium-sized enterprises (SMEs) to register for PayNow Corporate by the end of 2019.
OCBC reported that nine out of 10 of its new clients had pre-registered for the service since April this year.
Priscilla Soh, head of transaction banking at Standard Chartered Bank Singapore, said that the bank has seen “strong interest” for this service from companies and corporate clients across diverse industries, including e-commerce shops, airlines, logistics, charities, insurance companies and retail chains.

While PayNow has mostly been used for peer-to-peer transactions that requires one to know just the payee’s mobile number or national registration identity card (NRIC) number, the launch of PayNow Corporate this morning will mean that companies can pay and receive money in Singapore currency instantly from customers and other firms.

Businesses, firms and government agencies may do this by linking their respective unique entity number (a registration number that uniquely identifies them) to their Singapore bank account. That frees them from having to disclose their bank account numbers to payees.

For businesses using the new feature, the benefits could include receiving payments faster, enhanced operational efficiency, and greater visibility of business operations, she added.

For consumers, besides the greater convenience when they shop and pay, PayNow Corporate gives them the option of hassle-free transactions when paying taxes, hospital fees and phone bills, for instance.

Telecommunications firms such as M1 and Singtel have said that they plan to incorporate the feature, but did not give a specific timeline with regards to its roll-out.

A Singtel spokesperson said: “We are pleased to offer our customers more convenient options to pay their Singtel bills via Singtel Dash and PayNow Corporate. We will soon roll out these modes of payment on our billing system.”

The service will be available to businesses and corporate customers of seven participating banks, namely Citibank, DBS/POSB, HSBC, Maybank, OCBC, Standard Chartered Bank and United Overseas Bank (UOB).

Two more banks — Bank of China, and the Industrial and Commercial Bank of China — will also offer PayNow, the Association of Banks in Singapore (ABS) said in April.

Removing the middleman 

Keyis Ng, 30, co-founder of Cafebond.com, an online marketplace that sells coffee beans, said that PayNow would connect him “directly” to customers and suppliers.

“Currently, most of our transactions between customers and merchants are done through the third-party platform PayPal. Transactions usually take seven to 14 days to be cleared and reach our banks, so there is some waiting time involved.”

Ng also said that using PayNow would be a more “cost-effective” method as the company intends to start working with more Singapore-based coffee bean roasters.

“We are beginning to work with more merchants here and a growing customer base, so I thought if I can streamline the whole (payment) process, which will directly connect me to my suppliers and customers, it will definitely save us a lot of time and money in the long-term,” he said.

More affordable option 

Adrian Ang, 36, founder of food chain Stuff’d, said that PayNow is a more affordable mode of collecting cashless payment as opposed to installing machines from electronic payment provider Nets and those for credit card payments.

A transaction fee of about 2.3 to 3.5 per cent is imposed on businesses for accepting Visa and Mastercard payments, while the transaction fee is 0.8 to 1 per cent for Nets payments. These fees are layered on top of the initial set-up and annual fees.

Ang, who acknowledged that that there has always been a demand from customers for cashless payment, said: “We didn’t have the margin to afford the substantial credit card transaction fees. The cheapest was Nets, but then there were also monthly fees involved. PayNow is significantly cheaper, so it makes it more viable for us to adopt.”

PayNow Corporate, which is available for fast-and-secure-transfer banking transactions, means that customers and merchants can make interbank fund transfers at a lesser cost than when Nets or credit cards are used for payments. There will also not be a need to pay for infrastructure such as payment terminals.

Less cumbersome payment method 

Besides being a more affordable mode of cashless payment, PayNow promises to remove administrative hassles involving cheques, for example.

Keith Tan, 38, co-founder of procurement platform Zeemart said: “On average, a restaurant places S$5,000 (RM14,893.29) worth of orders weekly to their suppliers through Zeemart, with cheques being the predominant method of payment.”

Multiply that with the 1,000 outlets Zeemart handles, and a lot of time is spent on administrative paperwork when restaurants pay their suppliers, he added. “Cheques can be quite a messy form of payment. Restaurants have to have different people handling them, making sure they are signed, collected and then banked in.”

With PayNow Corporate,  Ang said that this would “digitise the entire food supply chain process from e-sourcing to e-payments,” creating a “clearer” form of checks and balances.

Education Minister Ong Ye Kung, also board member of the Monetary Authority of Singapore, said recently at an ABS event that 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.

There are still businesses who have not signed up, and some of these told TODAY that they would take a wait-and-see approach because their companies may not need the service for now.

At food-and-beverage chain Ya Kun, for instance,  Jesher Loi, its branding and market development director, said that it already has two to three payment modes — including its own loyalty programme through its mobile application, “a feature not available on PayNow”.

It is still early days yet for  Thomas Pek, managing director of Tai Hua Food Industries, who said that it may take some time for suppliers to adjust to the new payment methods.

“After all, some (suppliers) don’t need instantaneous payments, and instead give you a term of 60 to 90 days for payments,” he explained.

However,  Pek, who is also the president of the Singapore Food Manufacturers’ Association, believes it is still important to adopt such cashless payment modes. “We may need time to adjust but if we don’t move with technology, we’ll be ousted.”

Others such as  Low Cheong Kee, founder of Home-Fix, the hardware and home improvement products chain store, said that he has strong interest in PayNow Corporate even though he has not registered his business for the new payment feature.

“Handling cash is an expensive exercise. We used to engage security officers to bank in our cash sales every few days it soon became very expensive and we decided to cut cost and get our store managers to pop by to nearby bank outlets (to cash in the money), but that is productivity cost as well,” he said.

“I have personally used WeChat payment gateway in China and I was wondering when Singapore can be like that. This is one step in that direction,” he added. — TODAY

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