Rise of contactless payment technology
Around a decade ago, Near-Field Communications (NFC) was heralded as the next big thing in Singapore. The technology enables two devices to exchange data when close together, allowing mobile phones to become contactless payment tools.
Before this, there were contactless payment cards. The first example in Singapore was EZ-Link, introduced in 2001 so commuters could pay for and board public transport faster. It evolved into the standard known as CEPAS compliant or Contactless ePurse Applications - a hybrid payments card for transport and daily shopping.
The following years saw many more contactless payment options being launched in Singapore. The NETS FlashPay, the Visa PayWave, the MasterCard PayPass and most recently the Apple Pay for American Expresss-issued cards all signal the rise of contactless payments, not to mention the grant of rights for EZ-Link to develop mobile payments infrastructure in 2012.
Fast-forward to April 2016, when telecommunications provider Singtel announced the upcoming launch of its NFC-enabled SIM, which will allow people to pay for transit trips with smartphones using the embedded EZ-Link purse. This development signals a shift to contactless payment and is taking hold in Singapore, as it has in other parts of the world. For a glimpse of what may come, you can look to Europe, where new research by Gemalto reveals nine in 10 businesses have invested in a contactless solutions, with the remaining 10 percent planning to.
The recent announcement that Singaporeans will soon be able to use their smartphones to pay for transit rides is good news for small businesses. The emergence of mobile devices as tools for contactless payment indicates Singapore is closer to being a cashless society, and opportunities are growing for businesses to leverage the technology to improve operations and boost sales.
Singapore's business owners should prepare for change. After predicting that contactless payment technology would shake up markets in 2016, Deloitte warns consumer-facing businesses needed to adapt rapidly to rising demand for these payment options.
Now you know how contactless payment technology has evolved, we can look at how it impacts small businesses.