Paying by Nets using your mobile phone will become a reality this year.
The Nets mobile app, which is set for roll-out in the first half of the year, will transform your mobile phone into a virtual Nets ATM card that can be used for contactless payment at acceptance points.
It will debit directly from a linked bank account and will not require top-up. This will not be limited to just physical stores; you can also use the e-wallet for your e-commerce purchases or to pay bills.
Nets has also tied up with AliPay. These announcements are part of Nets 2.0, an initiative first announced in 2015.
"This is how we stay relevant to the changing lifestyle needs of today's consumers who are looking for faster payments with their smartphones," said Nets chief executive officer Jeffrey Goh yesterday.
In 2009, Nets introduced contactless FlashPay cards for tap-and-go payments at almost 100,000 merchant acceptance points in Singapore, as well as on the MRT and LRT.
The card contains a stored value and must be topped up.
A new wave of contactless Nets cards will also be released in the first half of this year. They allow transactions up to $100 without the need to key in a PIN.
Nets terminals will also be upgraded in phases this year.
The new Nets mobile app will function on phones which are enabled with Near Field Communication (NFC).
Payment can still be made using mobile phones without NFC technology by scanning a QR code using the Nets app.
One in three Singaporeans use Nets daily, said Mr Goh.
Here, 51 per cent of payment cards are contactless, according to the Singapore Payments Roadmap report published in August by the Monetary Authority of Singapore.
These improvements to Nets could also allow merchants to save more, said Associate Professor Steven Wong, Singapore Institute of Technology's programme director of infocomm technology.
He noted that the Merchant Discount Rate - the rate a merchant is charged for payment services - for using Nets is traditionally lower than that of credit cards.
Entering a market where there are already many alternatives, including Apple Pay and Samsung Pay, is where the challenge lies, said Forrester analyst Ng Zhi Ying.
"Nets has to demonstrate that its payment system has compelling advantages over the alternatives of cash and plastic cards - such as greater simplicity, higher speed, better reliability and value-added services," she said.
The Singapore Payments Roadmap report also said the economy could save as much as $150 million annually if payments became cashless at hawker centres and in taxis.
This is the next frontier for Nets - convincing these merchants as well as the 30 to 40 per cent of Singaporeans who do not have a credit card to go cashless, said Mr Goh.
This article was first published on Feb 8, 2017.
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