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Budget 2018 - Clearing house for Wallet Payments
07 Dec 2017 (56 views)

At the National Day Rally in 2017, PM Lee suggested that we should promote e-payment, similar to the AliPay and WeChat Pay in China.

Several operators have since launched their platforms (i.e. e-wallets) to allow e-payment using QR Code. They include GrabPay, NETS Pay and DBS PayLah. 
 
Each operator makes a special effort to market their wallets to merchants and hawkers. 

I am afraid that the proliferation of platforms will not help in promoting the use of e-payments. We cannot expect a merchant to sign up with several platforms to receive e-payments from customers on those platforms.
 
I suggest that the Monetary Authority of Singapore or the Association of Banks set up a clearing house for e-wallet payments. If the customer and merchant are on different platforms, they can clear their transactions through the clearing house. This is similar to the current process of clearing cheque payments through a clearing house.
 
The clearing house can also be the channel for customers to top up their e-wallets from their linked bank accounts and for merchants to transfer money to their linked bank accounts.
 
By using the clearing house, the wallet operators will not be saddled with the cost of making separate linkages to the banks. This will reduce the infrastructure cost for the wallet operators and the banks.
 
I also suggest that all e-wallet operators be licensed by the MAS. A condition of the licensing is that the operator has to set up a trust account in a bank that contains the total balance of all the balances in their customers' e-wallets. This will give confidence to customers that their e-wallets will be safe and that they will not lose money when their operator fails

I hope that my suggestion will be helpful to promote e-payments in Singapore, reducing the cost of payments and increase productivity and innovation.
 
Tan Kin Lian


Budget 2018 - Clearing house for Wallet Payments
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At the National Day Rally in 2017, PM Lee suggested that we should promote e-payment, similar to the AliPay and WeChat Pay in China.

Several operators have since launched their platforms (i.e. e-wallets) to allow e-payment using QR Code. They include GrabPay, NETS Pay and DBS PayLah. 
 
Each operator makes a special effort to market their wallets to merchants and hawkers. 

I am afraid that the proliferation of platforms will not help in promoting the use of e-payments. We cannot expect a merchant to sign up with several platforms to receive e-payments from customers on those platforms.
 
I suggest that the Monetary Authority of Singapore or the Association of Banks set up a clearing house for e-wallet payments. If the customer and merchant are on different platforms, they can clear their transactions through the clearing house. This is similar to the current process of clearing cheque payments through a clearing house.
 
The clearing house can also be the channel for customers to top up their e-wallets from their linked bank accounts and for merchants to transfer money to their linked bank accounts.
 
By using the clearing house, the wallet operators will not be saddled with the cost of making separate linkages to the banks. This will reduce the infrastructure cost for the wallet operators and the banks.
 
I also suggest that all e-wallet operators be licensed by the MAS. A condition of the licensing is that the operator has to set up a trust account in a bank that contains the total balance of all the balances in their customers' e-wallets. This will give confidence to customers that their e-wallets will be safe and that they will not lose money when their operator fails

I hope that my suggestion will be helpful to promote e-payments in Singapore, reducing the cost of payments and increase productivity and innovation.
 
Tan Kin Lian