SINGAPORE (May 25): Apple Pay has taken one big step forward in Singapore when all three local banks plus Standard Chartered announced on Wednesday they are making available the mobile payment system.
However, its widespread adoption depends very much on how merchants are willing to install this additional payment system, and how much additional convenience consumers can enjoy, analysts cautioned.
“With the existing types of contactless card payment systems already so convenient and simple to use, consumers need to be convinced that Apple Pay provides a much more convenient, secure and simple solution,” said Ng Zhi Ying, researcher with Forrester. “This will take some time before adoption will take off.”
In a flurry of announcements, DBS, OCBC, UOB and Standard Chartered said that Apple users here can now use their iPhone SE, iPhone 6s, iPhone 6s Plus, iPhone 6, iPhone 6 Plus and Apple Watch to make purchases in stores equipped with contactless readers.
They can do so with just a tap of their iPhone and a thumbprint or passcode for verification, or by simply holding their Apple Watch to the card reader.
Apple Pay was first available back in April, but only via American Express. Wednesday’s introduction included Visa and MasterCard, the two other major payment platforms.
Ng’s colleague, Clement Teo, said that while the iPhones are popular, the Android operating system is still in the majority. There is an existing alternative in the form of Android Pay, which hasn’t quite gained significant traction yet.
“In addition, Apple Pay still precludes cards issued by Citibank, ANZ, Maybank and Bank of China, and with the exception of UOB, the spending cap set at S$100 might deter users who wish to make larger purchases,” he adds.
Banks certainly recognise that contactless payment rates can be further lifted. Desmond Tan, Head of Group Lifestyle Financing, OCBC Bank, noted that at present more than half of consumers in Singapore own a credit or debit card with contactless payment capabilities. However, less than half ever made a purchase through contactless payments. “We are keen to change that percentage when it comes to mobile payments,” says Tan.
“We believe our customers will appreciate the seamless experience of paying with their favourite DBS/POSB cards using Apple Pay as well as the security and privacy it brings, while enjoying all the rewards and benefits that comes with our cards,” says Anthony Seow, Head of Cards and Unsecured Loans, Consumer Banking Group, DBS Bank. “We are confident that the adoption rate will be high here.”
The payment platforms see the potential to grow. Visa, citing a survey that it has done, noted that eight in ten Singaporeans are likely to pay using their mobile devices over cash and physical cards.
A similar proportion of more than 80% of the respondents also understand the benefits of these new mobile payment services.
Furthermore, 62% of the respondents also reported they would consider leaving their wallets at home if acceptance of mobile payments becomes sufficiently widespread in Singapore.
“This positive consumer sentiment towards mobile payments, coupled with the increased adoption of contactless payments, will drive mobile transactions to an unprecedented level,” says Ooi Huey Tyng, Visa country manager for Singapore and Brunei.
In its separate survey, MasterCard noted that consumers in Singapore are among Asia’s top three adopters of digital wallets. In addition, interest has been climbing steadily with one in four likely to use a digital wallet compared to just one in 20 three years ago.