Mobile payments are a technology that is fast becoming the mainstream in many parts of the world, as more people are now familiar with the concept of paying for goods and services with just a tap of their smartphone.
But in order for these payments to be accepted, merchants will need the right technology in place. For solutions such as Apple Pay and Android Pay, this means a contactless NFC reader, which has become the standard solution for much of the industry.
But is this practical everywhere? After all, not every merchant has this capability, nor every consumer has an NFC-equipped phone, particularly in developing markets.
The other option is QR codes, an older but simpler solution that allows users to make payments using their phone’s camera. And it is this that two Singaporean banks have turned to for their latest mobile payments offering.
DBS and OCBC have announced they will use a QR code-based system for their latest mobile payments initiative, which is being developed with payments processor Nets.
Some 2,000 Nets terminals will be equipped with QR capabilities in the coming months, with this figure expected to rise to 10,000 by the end of 2017. This will allow OCBC Pay Anyone customers to scan a merchant’s QR code in order to make payments of up to $1,000 a day.
Meanwhile, DBS PayLah! app users will be able to generate their own QR code, which they can display at their premises or send to others via social or online channels for payments.
The aim is to increase the use of alternative payments at smaller merchants. At present, 80 percent of payments at small shops in Singapore use cash, while this figure rises to 90 percent for hawker centres and wet markets.
Jeremy Soo, head of consumer banking group (Singapore) at DBS Bank, said Singapore has one of the world’s highest penetrations of smartphone, and surveys show the majority of user are open to using them for payments, so the market in the city-state is “ripe for disruption”.
“All we need is a solution that has a low barrier to entry, is easy for merchants to implement, and for consumers to use,” he continued. “The DBS PayLah! QR code payment solution ticks all the boxes and is well positioned to drive cashless payment behavior in Singapore.”