Dr Kaizad Heerjee, Assistant Chief Executive, Online Development Infocomm Development Authority of Singapore Speech - Digital Transactions Forum, Grand Copthorne Waterfront Hotel
Dr Kaizad Heerjee, Assistant Chief Executive, Online Development
Infocomm Development Authority of Singapore
Speech - Digital Transactions Forum, Grand Copthorne Waterfront Hotel
Singapore, 16 October 2002
Good morning Ladies and gentlemen.
1. It gives me great pleasure to be speaking here today. I would like to thank Consult Hyperion, and Asia Pacific Smart Card Association (APSCA), for organizing this forum. I was told that the Digital Transactions Forum was conceived following the success of two similar events that are held annually in London, namely, The Digital Money Forum and The Digital Identity Forum. It is great that you are combining these events and bringing them to Asia Pacific, as countries like Singapore get to share and learn from the gathering of distinguished practitioners, like yourselves, in these fields.
2. The advent of Internet commerce has seen the widespread use of digital transactions, in particular the use of digital or electronic money. According to the Bank for International Settlements (BIS), electronic money has been defined as value stored electronically in a device such as a chip-card or a hard-drive in a personal computer. Based on this definition, we can say that electronic money has certainly become prevalent in Singapore, from the EZ-Link card that beeps in the buses and our subway stations, to the use of the CashCard for car-park payments, and of course, the Electronic Road Pricing (ERP) that all of us have to go through.
3. While Singaporeans are generally open to new and alternative payment modes, cheques remain the dominant payment instrument in the country. The Singapore E-Commerce Survey 2000, conducted by the Department of Statistics and IDA, showed that cheque payment was still the most commonly accepted mode of payment for online transactions. They accounted for about 48% of payments that happen in this space. Cash on delivery was second at 27.90%, and credit card payments were third at 25.10% for Credit Card SSL. In 2001, the total number of Singapore dollar cheques processed was S$418 billion versus CashCards which was only at S$212 million.
4. Despite the dominance of cash and cheques, we see several milestone developments in Singapore that are taking us on a journey to become a cashless society - both for business-to-consumer and business-to-business applications.
5. The Singapore Clearing House Association (SCHA) and the Association of Banks in Singapore (ABS) have jointly developed a Cheque Truncation System or CTS in short. This is an image-based cheque clearing system where the cheque is scanned when deposited, and its electronic image transmitted throughout the entire clearing cycle. With this infrastructure, we foresee more innovative electronic payment instruments developed in the near future such as electronic cheques.
6. Singapore banks have also been successful in migrating customers from physical branches onto self-service networks such as Internet Banking. In the case of the Development Bank of Singapore or DBS, their Internet banking service transacted almost S$6 billion online in the year 2001. Furthermore, based on the recent ACNielsen online banking study, we find that more and more people are using such facilities and doing fund transfers and bill payments online. Integral to Internet banking are the many forms of electronic payments such as credit cards and direct debit. One example is the payment of parking fines. Motorists who get parking fines from Urban Redevelopment Authority (URA) in Singapore can pay them online so long as they have a credit card or an Internet Banking account.
7. We believe that the usage of Internet Banking can be further accelerated in Singapore, if companies can address the perceived concerns that such methods are insecure. The Government will play its part in helping overcome some of the user concerns over online security. For instance, in June 2001, a Forum on Public Key Infrastructure was formed that brought together industry players such as Netrust and PrivyLink and end-user companies to look a security and authentication solutions. In consultation with the industry, we have developed a national trust mark programme, known as TrustSg to boost consumer confidence in transacting online. These are some programmes that are aimed to instill greater user confidence, and through that, accelerate the adoption of online transactions, including innovative electronic payment solutions.
8. On the infrastructure front, we have also been actively promoting relevant global standards and best practices for industry development.
9. Earlier this year, the Electronic Bills Presentment and Payments (EBPP) Information Technology Standards Committee (ITSC) Working Group engaged Gartner to propose a national EBPP framework for Singapore. With the assistance from IDA and SPRING, the group endorsed the recommended bank-centric EBPP model where the bank's website is the main interface for online presentation and payment of bills by consumers and businesses.
10. Taking this initiative another step forward, the Association of Banks of Singapore (ABS) is working with IDA and industry partners to explore the feasibility of a bank-centric model. This will help to define the national EBPP platform that will integrate all the key banks, billers and service providers/partners. We believe that EBPP will help to boost online transactions, in particular electronic payments, enhance cost savings for businesses and improve convenience for consumers.
11. Despite these achievements, we still have a number of challenges ahead of us. For example, we have yet to see banks realize the full potential of a streamlined electronic payments infrastructure by collaborating with each other, rather than investing in their own infrastructure every time. We have also much to learn from the United Kingdom, given that their Financial Service Authority (FSA) has developed a new regulatory regime for e-money issuers. We are glad that the Chairman of the UK Electronic Money Association is here to share with us on the details of the regime, and how it will lead to innovative electronic payment solutions
12. In closing, I think I have only glimpsed the potential of digital transactions. What I've shared are just examples of how Singapore is progressively bringing the vision of a digital future to reality. We may come from different countries but we face similar business, technical issues, and challenges in making this happen. Whether we can fully reap the potential of this digital future depends on the collaborative efforts to achieve international interoperability and the commitment to overcome social and regulatory concerns. IDA really welcomes forums such as this as it provides like-minded individuals the opportunity to network and exchange ideas. I wish all of you a very fruitful time in the next two days as you exchange notes on how you intend to create a digital future.
Thank you.
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