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In recent years, businesses with a consumer-facing front have seen a greater adoption of various digital payments over the traditional means of payment – mainly cash.
The push for digital payment solutions is part of Singapore’s Smart Nation vision to become a cashless society. Not only that, the estimated cost of processing cash and cheques was around $2 billion a year, or around 0.5% of GDP in 2015. This is an amount that businesses, especially small businesses that switch to e-payments, could save on. Additionally, there could be more potential savings, such as the time and effort businesses spend to count physical cash, reconcile it and deposit it in their banks.
For many businesses, offering contactless digital payment options is no longer just a “good-to-have.” Nevertheless, you also need to optimise costs while limiting inconvenience for your customers when considering the various digital payment solutions to offer (or not offer).
What Are The Different Methods To Collect Digital Payments From Customers?
#1 PayNow
In 2017, PayNow was launched as a free peer-to-peer fund transfer service for retail customers of 10 participating banks and four non-bank financial institutions (NFIs). This service enables customers to send and receive Singapore Dollar funds from one bank or e-wallet account to another in Singapore through FAST by using just their mobile number, Singapore NRIC/FIN, Virtual Payment Address (VPA), or a Unique Entity Number (UEN) instantly.
In 2018, with the launch of PayNow Corporate, it is easier for businesses to pay and receive funds instantaneously using their UEN to make or receive payments instantly without the need to know or disclose any account numbers.
Accepting payments through PayNow is another way to increase convenience for your customers. By placing the quick response (QR) code at your storefront or on invoices, you can save costs on cash and cheque handling fees, which also allows you to receive payments instantly into your business account.
Corporate customers with OCBC can enjoy a fee waiver on PayNow payments till 31 December 2025. Payments submitted through the PayNow Corporate service will be transferred immediately through FAST (Fast and Secure Transfers).
Read Also: What Is PayNow For Business And 4 Reasons Why Businesses Should Adopt It
#2 Singapore Quick Response Code (SGQR) standard
As the number of QR codes by the different payment solution companies increased, the Singapore Quick Response Code (SGQR) was launched as the world’s first unified payment QR code in 2018. The SGQR helps to facilitate seamless e-payment acceptance for businesses and merchants at POS counters.
The benefit of SGQR is that customer-facing businesses do not need to carry multiple QR labels from different e-payment providers, instead, only one SGQR label is needed, resulting in less clutter.
For the consumer, making a payment is a simple 3-step process. The first would be to pick the preferred payment option on the SGQR label and launch the payment app. Second, to scan the SGQR code and check the merchant’s name. Third, is to key in the payment amount and complete the transaction. This simplifies the process for both the business and your customers.
#3 Cards Collection
The invention of the first credit card – known today as the Diners Club card – in 1950 was born out of a moment of forgetfulness by its founder, Frank McNamara, who left his wallet behind while out dining. Since then, the use of credit and debit cards has been widely adopted as a convenient cashless payment method, both internationally and locally.
The main credit card operators in Singapore are VISA and MasterCard, while American Express and Diners Club are the main charge card operators. The appeal of credit cards extends beyond their convenience. They also offer users a long credit term (e.g. up to 23 days) before payment is due and are usually tied to a rewards programme that allows users to accumulate cash back or air miles with every dollar of spending. As a result, it comes as no surprise that credit cards accounted for 36% of all POS transactions in 2022, while debit cards accounted for 21%, compared to cash at 19%.
Given these statistics, businesses with a customer-facing front should recognise the importance of offering card payment options to their customers.
#4 NETS Business Payment Solutions
Network for Electronic Transfers (NETS) is one of Singapore’s most well-known electronic payment service providers. Founded in 1985, NETS enabled consumers to pay via their automated teller machine (ATM) cards instead of cash, which helped Singapore’s push for Electronic Funds Transfer at Point-of-Sale (EFTPOS).
Today, NETS offers even more contactless payment options beyond the Point-of-Sale (POS) systems, including Unified POS and NETS Integrated POS. Businesses also have the option of using the SGQR label, which facilitates contactless payments without needing a physical POS terminal. These cashless payment solutions enhance business efficiency and cash management work compared to traditional cash registers.
Furthermore, with the growth of ecommerce, businesses that have an online presence can also tap on NETS online payment alternatives such as NETS Click, eNETS Gateway, and NETS QR Online. These solutions offer consumers a convenient means of making direct debit or credit card payment whether through mobile or web platforms, resulting in a faster and seamless shopping experience.
#5 OCBC OneCollect
Usage of PayNow by small and medium enterprises (SMEs) doubled in 2020. Following a higher adoption by the general public, major banks in Singapore have created their own merchant apps to facilitate PayNow collections amidst the higher transaction volume.
One such example is the OCBC OneCollect, a mobile application that integrates PayNow QR and SGQR for real-time collection, notification, and transaction management.
The app makes it easy for business owners and frontline staff to reconcile PayNow QR payments automatically made across an SME’s multiple outlets. All of the transactions can be viewed in one place through the app, and you do not need a separate point-of-sale (POS) terminal as a smartphone can be used to generate the QR code for customers to make payment.
There are no setup fee charges, and businesses just need to pay a low transaction fee of 0.25%. Moreover, there is greater convenience for customers as they can pay with ease through widely accepted scan-and-pay apps. These include from any of the 11 participating PayNow banks* in Singapore, 4 Non-Financial Institution (NFIs)* and UnionPay – supported by more than 50 global mobile wallets.
Read Also: Guide To Payment Solutions You Need To Offer Your Customers In Singapore
Which Digital Collections Method Should Businesses Choose?
By now, there is no question about whether businesses should offer a choice of digital payments to their customers. Instead, businesses may wonder what the best way is to collect payments digitally from their customers given the number of available options.
Most customer-facing businesses that have been operating for a few years might already have a NETS POS terminal as it is a popular means of collecting payments in Singapore in a contactless and digital manner. Businesses can add-on different payment options like credit cards, eNets credit, and even the SGQR sticker to the single POS terminal, making it convenient to offer and collect different payment methods. However, the downside of using a POS terminal is that you need to pay a monthly subscription fee for the terminal and for the different payment options, which can cost up to 3.5% in transaction fees.
Based on the past two years, more consumers have also been adopting mobile payment methods in favour of unnecessary physical contact, including card swipes and cash. Therefore, businesses that wish to focus on collecting QR code payments can instead consider using OCBC OneCollect.
Businesses that use OCBC OneCollect can collect payment using their existing smartphone without the need to rent or set up a POS terminal. Furthermore, businesses only need to pay a transaction fee of just 0.25% for PayNow transactions (which is free for the first 3 months).
Aside from being a cost-efficient solution to accept digital payments, businesses will also benefit from increased productivity. Staff will be notified in real-time when payments are received, eliminating the need to verify by looking at the consumers’ phones; this allows the staff to focus on serving consumers and increasing sales. Staff can clearly view payments received for the day, helping them easily perform reconciliation.
Digital payments are one of the key pillars of the Smart Nation that Singapore is remodelling itself into. Businesses must be in tune with this transformation by offering convenient digital payment solutions to their customers.
By using payment solutions like OCBC OneCollect, businesses can improve their productivity, reduce transaction costs, receive real-time notifications and consolidate their daily transactions (especially if they manage multiple businesses/outlets), and get a reprieve from manual reconciliations. All these translate into retaining more of their profits.
Read Also: What Is eGIRO, And How Businesses Can Use It For Even Faster Payment Collections From Customers
*PayNow is supported by these 11 banks – Bank of China, CIMB Bank Berhad, Citibank Singapore Limited, DBS Bank/POSB, HSBC, Industrial and Commercial Bank of China Limited, Maybank, OCBC Bank Ltd, Standard Chartered Bank, UOB, Trust Bank and 4 Non-Bank Financial Institutions (NBFIs) – GrabPay, LiquidPay, Singtel Dash and Xfers)
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