FIVE TIMES MORE CROSS-BORDER PAYMENTS AT KOUFU
Food and beverage firm Koufu – best known for its food court business – offers its customers the option of paying through a NETS QR code.
That has become the preferred payment method for tourists from China and Malaysia, who can save on foreign exchange fees.
From 2022 to 2023, the number of cross-border payments made using the NETS QR code at Koufu increased five-fold from about 20,000 to 100,000.
Koufu can also pass down cost savings to its customers, thanks to QR code payment processing fees that are cheaper compared with transaction fees from major credit card companies.
Mr Chan Jiankai, head of operations of Koufu’s foodcourt and coffeeshop division, told CNA: “The reduction in transaction fees actually helps us to defray increasing costs due to inflation. This allows us to keep our prices competitive (so) that tourists and Singaporeans alike can enjoy affordable food in Singapore.
“In the future, we do foresee most people using their phones to pay, and having our doors open to this new digital platform will help us.”
Up to 60 per cent of Koufu’s cross-border payments are through China’s WeChat and Alipay apps, Mr Chan said.
THE CHALLENGE OF SCALING UP
While Singapore aims to extend cross-border payment systems to the rest of Southeast Asia, scaling up has proven to be a challenge.
Several factors to consider in such linkages are whether the payment systems in the two countries are technically compatible, and ensuring compliance with the nation’s laws and regulations, said Mrs Ong-Ang Ai Boon, director of the Association of Banks in Singapore.
“We need to make sure that the penetration requirements in both countries are met,” she added.
“We have learned a lot from the linkages with Thailand, India and Malaysia. We will put these lessons learned to good use for future payment linkages.”
In order to extend Singapore’s payment offerings beyond the region, MAS has been working with BIS Innovation Hub Centre. Linking multiple instant payment systems at scale would mean faster, cheaper and more accessible cross-border transfers.
