SINGAPORE -- The Association of Banks in Singapore will soon launch a new service enabling retail account holders at seven banks here to send one another money by using cellphone numbers instead of account numbers.
The PayNow peer-to-peer fund transfer service, announced Tuesday, goes live July 10. It will serve customers of top three Singaporean banks DBS Group Holdings, Oversea-Chinese Banking Corp. and United Overseas Bank, as well as Citibank, HSBC, Malayan Banking and Standard Chartered Bank. Customers will be able to send money instantly by supplying recipients' mobile numbers linked to their bank accounts. National ID numbers can be used instead. The service will be free, including transactions between two different banks.
The seven banks cover around 90% of the total retail transaction volume in the city-state, according to the ABS. While similar services are already offered by individual banks in Singapore, they are commonly based on the mobile wallet system, meaning that users must deposit some cash into their wallets before they can transfer it to someone else. The new service eliminates this step and allows direct account-to-account transfers using cellphone numbers. The service will be incorporated into participating banks' existing internet banking systems and mobile banking apps.
The ABS aims to expand the service to include transactions between retail customers and businesses next year, Director Ong-Ang Ai Boon told a news conference Tuesday. Further expansion to include government-related payments on PayNow is also a possibility, according to the association.
The new service is Singapore's latest push into financial technology, an area aggressively pursued by the public and private sectors alike. Expansion of cashless payments is being actively sought in order to enhance efficiency and reduce transaction costs. Singapore follows Thailand's PromptPay, a similar service launched in March that lets bank account holders there send funds using mobile numbers or national ID numbers.
Pranav Seth, who heads OCBC Bank's e-business, business transformation, and fintech and innovation group, touted a "war on cash" and said the "simplicity, accessibility and ubiquity" of PayNow will make digital payment "simpler than using cash" in many cases. A similar service offered by OCBC has seen transactions quadruple and payment volume increase tenfold since last year, according to the bank.
At DBS and subsidiary bank POSB, check usage in 2016 was down 22% from 2012 levels. This was due largely to growth in electronic transfers, including a mobile wallet service that has racked up some 500,000 users to date.