Implementation Plans for Cashless Public Transport System

2 Ms Tin Pei Ling asked the Minister for Transport how the plan for a cashless public transport system by 2020 will ensure that the elderly who rely on cash as their sole mode of payment will not be left out.

3 Dr Tan Wu Meng asked the Minister for Transport (a) what are the consultations that LTA has conducted prior to announcing the plan for a cashless public transport system by 2020; and (b) of the consultations which took place, what proportion of members of the public consulted were senior citizens.

4 Dr Tan Wu Meng asked the Minister for Transport what is the estimated annual cost of maintaining existing cash transaction capabilities in our public transport system.

5 Mr Ang Wei Neng asked the Minister for Transport how will the Ministry make it easier for commuters to top up their EZ-Link card at MRT stations, bus interchanges, convenience stores and to use cardless payment via QR codes and remotely via the Internet.

The Senior Minister of State for Transport (Dr Lam Pin Min) (for the Minister for Transport): Mr Speaker, may I have your permission to take Question Nos 2 to 5 together?

Mr Speaker: Please proceed.

Dr Lam Pin Min: Mr Speaker, today, public transport is already largely e-payment based. More than 98% of commuters use Contactless e-Purse Application Specification (CEPAS) cards which include EZ-Link, Network for Electronic Transfers (NETS) FlashPay and the Land Transport Authority (LTA) Concession Cards, to pay their public transport fares. These include most senior citizens as there are almost 700,000 Senior Citizen Concession Card holders.

However, two out of three commuters top up their cards with cash. Topping-up with cash is cumbersome for the commuter as he has to queue up to withdraw cash, then queue up again to top up the card. Maintaining cash facilities at Mass Rapid Transit (MRT) stations and buses also imposes additional costs of almost $20 million a year.

Our aim is for commuters, including tourists, to avoid the hassle of doing cash top-ups. In fact, they should not need a Specification for Contactless e-Purse Application (CEPAS) card for transport payments. This can be achieved through the new Account-based Ticketing (ABT) system, which will allow commuters to use contactless credit or debit cards to tap in and out of the public transport system. We have started piloting the ABT system for MasterCard holders from March 2017 and have since garnered more than 100,000 participants. From June 2018, we will extend the pilot to VISA and NETS 2.0 holders. ABT will eventually be fully rolled out to the entire public transport system.

For commuters who continue to use CEPAS cards, we will make electronic top-ups more convenient. They will be able to top up their travel cards online, through General Interbank Recurring Orders (GIRO) or using their mobile phones. We will also be able to top up our children or senior parent's travel cards easily.

We are challenging LTA and TransitLink to make ABT and electronic top-ups so convenient for commuters that cash top-ups and payments will become the less preferred option. We will manage the transition gradually over several years, so that no commuter needs to feel left out. We will focus attention on the small minority of commuters who need further assistance. LTA and TransitLink are geared up to help. For example, about 150 service agents, of whom a quarter are seniors themselves, will be deployed over the next nine months to help commuters learn how to use the ticketing machines at MRT stations. We are also working closely with other agencies, such as the Monetary Authority of Singapore (MAS), to make e-payments more accessible to all, including those who do not have bank accounts, which is the case for some foreign workers.

An e-payment based public transport system is an important initiative to make life easier for all commuters. That is our primary objective. We have consulted widely across a number of demographic groups. We will continue to widen and deepen stakeholders' engagements. The process is ongoing.

Mr Speaker: Mr Zaqy Mohamad.

Mr Zaqy Mohamad (Chua Chu Kang): I thank the Senior Minister of State for his response just now. And, of course, Mr Speaker, congratulations.

The first question is, for ABT, which countries have so far deployed this and what are some of the learning points that we have taken on board to smoothen the adoption and, certainly, how do we bring the seniors who may not be so IT-savvy on board?

Secondly, the Senior Minister of State also mentioned about cost savings. Would that be passed on to consumers?

Dr Lam Pin Min: I would like to thank Mr Zaqy Mohamad for the two supplementary questions. I will answer the second question first. In addition to cost savings, there will also be manpower resource savings as well. Staff of the Public Transport Operators (PTOs) who are currently providing ticketing services at rail stations will be freed up to better concentrate on their core duties in rail operations. The cost savings can also be channelled to hiring service agents in educating elderly commuters in this cashless journey and also to produce educational materials. As to whether the eventual cost savings will be passed on to commuters, we will have to look at the PTOs' profit and loss eventually.

As to ABT, this is a pilot project that has been introduced just at the beginning of this year. We have started with MasterCard, we will be implementing it together with VISA and NETS next year. I am not aware whether there are any countries that are using this system. Nonetheless, we will be sourcing around to see what the best practices are and implement them whenever necessary.

Mr Speaker: Dr Tan Wu Meng.

Dr Tan Wu Meng (Jurong): May I also congratulate Speaker on your appointment and thank you for your indulgence. I have got two supplementary questions for the Senior Minister of State for Transport. Firstly, regarding consultation for changes to a cashless public transport system, can the Senior Minister of State reassure us that there will continue to be a significant face-to-face component of such consultations so that elderly residents, who cannot always advocate for themselves, will still be involved in the consultation process?

Secondly, will the Ministry of Transport (MOT) consider applying some of the cost savings and manpower savings towards hiring and deploying more staff who are fluent in dialects and the vernacular, so that our seniors can remain included and able to be guided on this journey towards a cashless transport system?

Dr Lam Pin Min: I would like to thank Dr Tan for the two supplementary questions. Yes, LTA and Transit Link have engaged advisors as well as grassroots organisations of the areas where the 11 passenger service centres would be ceasing cash top-ups from 1 September 2017. All in all, 29 constituencies were engaged and, out of about 300 participants consulted, about 30% were seniors. LTA has conducted a series of focus group discussions, face-to-face discussions across a representation of respondents, including senior citizens, so that we can better understand their concerns and feedback. Out of 120 participants, about 25% were seniors.

We are pretty encouraged by the responses and support given and will continue to monitor the feedback closely as we progressively roll out some of these new initiatives. We will also continue to widen and deepen engagement of various stakeholders.

As to the Member's second question on cost savings, we will take these suggestions seriously and we will convey them to LTA and Transit Link to hire more service agents who can engage all the senior citizens more effectively.

Mr Speaker: Mr Ang Wei Neng.

Mr Ang Wei Neng (Jurong): Mr Speaker, congratulations as well. I thank the Senior Minister of State for the comprehensive replies. I have three supplementary questions. First, I understand that, right now, commuters have to pay 25 cents if you do an EZ-Link reload using credit card or GIRO, or they even have to pay 50 cents if they go to 7-Eleven to top up the card. All these are costs and I hope MOT can work with their partners to reduce the cost of the EZ-Link top-ups.

For the second question, will MOT explore allowing commuters to pay MRT and bus fares using Apple or Android Pay via their mobile phone?

The third supplementary question: for existing means of cashless top-ups, commuters typically need to have a bank account but some Singaporeans do not have bank accounts. Even if they have a bank account, they do not have enough money to maintain a minimum cash balance of $500 or $1,000. As a result, they have to pay $2 admission fee to the banks when the banks are earning billions of dollars a year. So, I hope MOT can work with MAS to ensure that every Singaporean can have a savings account that does not need to maintain a minimum balance without attracting any bank charges.

Dr Lam Pin Min: I thank Mr Ang for the supplementary questions. A high proportion of Singaporeans, including the seniors, have bank accounts and this is also based on information that we gathered from the Goods and Services Tax (GST) Voucher scheme where only a small proportion of Singaporeans encashed their cheques received under the GST scheme, which could be an indicator that those who did so may not have a bank account.

To ensure that the elderly have access to affordable and convenient basic banking services, many major retail banks have already offered basic banking accounts since 2002, and these accounts generally come with automated teller machine or debit card facilities and Internet banking services as well and can be maintained at a very low cost. Some banks also provide the service free for school-going children, the elderly and for those on public assistance by waiving the account service fees.

However, we understand that many elderly may not be aware of these services, and MOT and MAS will work with the industry as well as with grassroots organisations to reach out to this group of elderly and to help them to transit and adapt to the e-payment options. Alternatively, family members can also help top up for these seniors via online or mobile apps.

LTA and Transit-Link will also ensure that cash alternatives to paying for transport rides, such as those for the sale and top-up of stored value cards, remain available within the vicinity of the public transport modes to cater to those commuters who really cannot convert to cashless mode, for whatever reasons.

With regard to the Member's supplementary question on the transaction fee, we have to take this back to take a look and to discuss it with the various agencies.

However, I would like to conclude that the world is changing very fast, technological advancement and innovative solutions are introduced incessantly. While they can make lives more convenient and efficient for many, they also disrupt the lives of some. As a nation, we need to embrace such technological changes and ride on the positive impact that they can bring to our lives. Further procrastination will only delay the problem and make catching up even more challenging. So, the best way to not leave anyone behind is to take the extra effort to bring everyone along this journey. I can assure the Members that the Government will do its best to facilitate it.

Mr Speaker: Mr Louis Ng.

Mr Louis Ng Kok Kwang (Nee Soon): I think there is one more group we also need to reach out to, and I am wondering whether MOT will be working with the Ministry of Manpower to reach out to the foreign workers, many of whom actually do not have bank accounts.

Dr Lam Pin Min: Yes, indeed. This is another group that we will try to facilitate as much as possible. We will be working with the banks and MAS to see how we can facilitate the opening of bank accounts for this group of commuters. At the same time, I have also mentioned in my replies just now that for those commuters who really cannot switch to e-payments, there will still be cash alternatives at sites that are nearby to the transport modes.