Monetary Auth of Singapore Payment cards
Many people use bank cards (i.e credit and debit cards) to make payment. They find it convenient. It is more convenient than mobile payment (using QR code).

Payment by bank codes has the following disadvantages:

a) The merchant has to pay a fee of 2% to 3.5% for credit card and 1% (or thereabouts) for debit cards. 

b) Some people do not have a bank account (e.g. children, poor people, seniors) or are not comfortable about using a payment card.

An alternative to using a bank card is to use a stored value card, such as Nets or Ez Link. These cards are already widely used for public transport. The money in the cards can also be used for retail payments. 

One problem with the use of the payment card is that the merchant needs to have a device to read the card. The cost of these POS devices has dropped significantly, and is now less than $150. The merchant also has the option to run an app on a mobile phone (with NFC capability) to act as the POS device. 

Most small payments are now made by cash. It has the following disadvantages:

a) The retail worker has to count the money and give change. This takes time. Sometimes, they do not have sufficient change.

b) The retail worker has to reconcile the daily collection against sales (and often there is discrepancy) and to visit the bank to deposit the cash. The bank charges a fee for cash deposits.

c) There is the risk that the retail worker may pocket the cash collected.

d) There is a shortage of retail workers.

e) Handle cash can transmit virus and disease.

We should promote the use of stored values cards for cashless payments. 

Tan Kin Lian

 

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