Regulating Transaction Fees and Platform Rental Fees Charged by Cashless E-payment Platform Providers
Prime Minister's OfficeSpeakers
Summary
This question concerns whether the Ministry will regulate e-payment transaction and platform rental fees by mandating caps to accelerate adoption among small businesses and consumers. Assoc Prof Daniel Goh Pei Siong raised the query, to which Deputy Prime Minister Tharman Shanmugaratnam replied that the government prioritizes fostering competition through an open architecture system to keep costs affordable. He highlighted initiatives like the Singapore Quick Response Code (SGQR) and PayNow for businesses, which reduce overhead by eliminating the need for expensive point-of-sale terminals and rental fees. Deputy Prime Minister Tharman Shanmugaratnam noted that the government is promoting low-cost options like NETS Pay and engaging stakeholders to raise awareness of various e-payment solutions. While currently focusing on market-driven affordability, the government is studying the experiences of other jurisdictions to decide if formal fee regulation is necessary in the future.
Transcript
57 Assoc Prof Daniel Goh Pei Siong asked the Prime Minister whether the Ministry will regulate transaction fees and platform rental fees charged by cashless e-payment platform providers by mandating caps on such fees so as to accelerate the widespread adoption of e-payment by small and medium enterprises and consumers.
Mr Tharman Shanmugaratnam (for the Prime Minister): Assoc Prof Daniel Goh asked if the Monetary Authority of Singapore (MAS) will regulate transaction fees and platform rental fees charged by e-payment platform providers, so as to accelerate the adoption of e-payments.
Transaction fees vary across different types of payments, whether it is cash, cheques, debit cards, credit cards, Network for Electronic Transfers (NETS), stored value cards, e-wallets or PayNow. The cost of using cash or cheques is actually relatively high, and this is, in fact, one of the motivations for promoting e-payment.
We are, in fact, taking a multi-pronged approach to promote e-payment. This includes:
(a) putting in place infrastructure, such as Fast And Secure Transfers (FAST), to ensure an open architecture;
(b) ensuring the interface is convenient and easy to use;
(c) stipulating standards when necessary, such as the impending common quick response (QR) code standard for Singapore (SGQR), so that a merchant just needs one QR code to receive all types of e-payment;
(d) promoting adoption of e-payment amongst merchants and consumers; and
(e) keeping cost of e-payment as low as possible, which is what Assoc Prof Daniel Goh has asked about.
To keep fees at a reasonable level, it is important to ensure there is enough competition. Hence, we have always insisted on an open architecture system so that e-payment will not be monopolised over time by one dominant player.
The Monetary Authority of Singapore (MAS) worked with the banking industry to develop PayNow. Today, it enables convenient and safe peer-to-peer transactions, and we are now working to extend PayNow to businesses as a cheaper way to make e-payments. PayNow will use the SGQR for e-payment transactions, which means there is no need for any point-of-sale terminals or any rental fees involved for this equipment.
NETS has recently announced plans to roll out NETS Pay, which offers a wide range of solutions for merchants to receive payments from consumers at an affordable rate. NETS Pay will add to the range of low-cost e-payment solutions available in the market.
The Government has also been engaging various stakeholders to raise awareness of the available e-payment solutions and, hence, help drive further adoption. Businesses need to be aware of the advantages of various e-payment solutions and identify a solution that would best suit their needs.
As of now, our focus is to ensure these low-cost options are available and spur competition to keep cost affordable to small businesses. It will minimally be cheaper than having to handle cash. As to whether we should regulate the fees for e-payment, we are studying the experience of other jurisdictions and will study them carefully.