63
Payments Regulation in Asia
Singapore
PAYMENTS MIX
Singapore’s payments landscape encompasses a variety of digital tools for consumers. In 2016, the Monetary Authority of Singapore (MAS) described “An Electronic Payments Society” at a conference on fintech and financial inclusion. 169 This was a part of a broader national initiative to make Singapore a Smart Nation. 170 To bring about this electronic payment’s society, the MAS focuses on four key elements; continuous innovation, increasing consumer confidence, maximizing payments productivity, and financial inclusion. They laid out a plan that called for streamlining regulation, creating a payments council, focusing on interoperability of infrastructure, and pervasive digitization. 171 This led to increased QR-code development both domestically and cross- border through settlement linkages. In line with the MAS’s priorities, the streamlined regulation was realized in 2018 with the Payment Services Bill. This regulatory framework consisted of two parallel regimes, one regime that allowed the MAS to regulate and designate participants in the payment supply chain and one regime to issue single licenses to participants that covered diverse product offerings as opposed to individual licenses per product type. 172 The goal of this legislation was to remove barriers to the development of new payment technologies from current license holders and new participants alike. Between 2017 and 2022, the data shows significant shifts in both the point-of-sale (POS) and ecommerce sectors that reflect the MAS’s initiative to promote digital and mobile payment platforms. In ecommerce, digital wallets have increased 22% while credit card spending dropped 25% to just 42% (Figure 25). Debit cards also experience huge growth, nearly tripling its share of spending from 4% in 2017 to 11% by 2022. For POS transactions, digital wallet’s share of spending grew fivefold between 2017 and 2022, growing from just 4% in 2017 to nearly 20% in 2022 (Figure 26). This was mostly at the expense of cash which declined 21 percentage points between 2017 and 2022, reflecting the policy initiated by the MAS to increase electronic payments. Credit card’s share of POS spending grew about six percentage points and debit declined about two percentage points, evidencing a shift from cash to card and from card to digital payments for in-store transactions. Singapore’s quick response code (SGQR) standards were introduced in 2018 and has further facilitated the use of card and bank accounts at POS. 173 These standards were used to develop a single quick response (QR) code that combined multiple QR codes from different payment schemes. 174 These codes allow consumers to pick their preferred scheme, scan the code, and initiate the
169
https://www.mas.gov.sg/news/speeches/2016/an-electronic-payments-society
170
Ibid
171
Ibid
172
https://www.mas.gov.sg/news/media-releases/2018/new-regulatory-framework-to-enhance-pay-
ment-services-in-singapore 173
https://www.smartnation.gov.sg/initiatives/strategic-national-projects/e-payments/
174
Ibid
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