By Dawn Tay

WITHIN the next two years, you may be able to leave the house without any money, yet travel, shop and eat, just using your ez-link or Nets FlashPay card.

To bring Singapore one step closer to becoming a cashless society, the Government announced yesterday a $16- million move to grow the number of places where consumers can use contactless stored-value cards to pay for purchases.

It aims to increase the number of card terminals at retail and food-and-beverage outlets by about five times - from 5,000 to almost 24,000 in two years' time.

It will cut rental and transaction fees for payment terminals to encourage more merchants, especially those running smallerscale businesses, such as hawkers and provision-shop owners, to install them.

From now, the rental fee - in the "tens of dollars" - will be waived for the first year, said Infocomm Development Authority (IDA) chief executive Ronnie Tay.

Transaction fees will also be cut for two years by up to 50 per cent, down from the prevailing rates of 1 to 1.8 per cent per transaction, he said.

To boost competition, three players - EZ-Link, Nera Telecommunications and Way Systems Solutions - will join Network for Electronic Transfers Singapore (Nets) and PaymentLink in deploying card-payment terminals.

When fully deployed by 2011, the terminals are expected to handle more than 94 million e-payment transactions each year, said Acting Minister for Information, Communications and the Arts Lui Tuck Yew in his keynote address at the Infocomm Industry Forum, held yesterday at Suntec Singapore.

He added: "This should also lead to a 15 to 50 per cent reduction in merchant fees...which is an important factor in lowering the barrier to adoption of e-payment by merchants."

Consumers hold almost six million contactless stored-value cards.

However, their use is largely limited to the transport sector, said the IDA. For example, only 20 per cent of Nets FlashPay cards are used in retail, said a Nets spokesman.

Retail outlets that do offer cashless payment tend to be higher-end boutiques, said IDA senior director (industry cluster group) Tan Eng Pheng.

Compared to people in countries such as Sweden and the United States, Singaporeans have been slow to adopt e-payment, preferring to carry around cash instead, according to statistics from the Bank of International Settlements.

A major hurdle in the Government's vision of a cashless nation - where payment is faster, more hygienic and convenient - has been the reluctance of smaller retailers to embrace e-payment, said Rear-Admiral (NS) Tay.

The IDA hopes to address their major gripes - monthly terminal- rental fees and card-transaction fees - with its latest move.

Most of the terminals to be deployed can accept most contactless stored-value cards in circulation now, said the IDA.

However, business agreements will need to be struck between the card issuers such as EZ-Link, the terminal deployers and retailers, to determine which cards are accepted at different retail outlets.

What this means for the consumer: They will need to decide which stored-value cards are best suited for their transport and shopping habits, just like they do for credit and debit cards.

Consumers my paper spoke to were generally in favour of the increase in e-payment locations, but retailers were more cautious.

Civil servant Peh Lee Chin, 26, said: "E-payment would be more convenient - you just tap and go. But if the card is misplaced, anyone who picks it up can use it. I may have to top up the card more frequently."

Provision-shop owner Ong Liang Eng, 55, installed a Nets FlashPay terminal a month ago in his Toa Payoh store. But he estimated that fewer than 10 of his 300 or so customers a day use it.

He said: "More terminals may mean more people will use them as it's more convenient - they just tap and go without needing to key in their Nets PIN or wait for change.

"However, retailers like us would still prefer cash as we can get it immediately without worrying about transaction fees and waiting a day for the money to come in."

dawnt@sph.com.sg

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