How Technology Is Changing the Way You Pay Using Credit Cards
SINGAPORE: From paying bills to making purchases, some innovations have changed the way you make payments using your credit cards. All credit cards come with a 3-digit or 4-digit CVV (Card Verification Value) security number that keeps your cards safe from any fraudulent activities.
Based on Worldplay’s Global Payments Report 2017, 66% of consumers use credit cards as their mode of payment. Although the use of e-wallets is growing at a faster rate (11%), Singaporeans also use Apple Pay, bank transfers, and PayPal to make payments.
Singapore is becoming a cashless and contactless society due to the popularity of credit cards and CashCards. If you visit the country, you will notice that every car and motorcycle has an In-Vehicle-Unit or IU fitted on either the windscreen or the handlebars. This IU is used to pay the toll fee (ERP Toll) and for access to all car parks with Electronic Parking System (EPS). The payment is done by inserting a contactless stored-value card in the IU or via a credit card through MotorPay.
Let’s look at some other innovations that are changing the way you use your credit cards to make payments:
Near Field Communication (NFC)
Near Field Communication is a technology that lets you use your smartphone as a mode for contactless payments. The NFC chip in your phone needs to be activated at a contactless terminal upon which data will get exchanged between the 2 devices. You just need to hold your phone in front of the terminal.
Credit cards are equipped with this NFC technology like Mastercard Tap and Go and Visa payWave. Just hold your card in front of the terminal and you can authenticate purchases of S$100 or less without any PIN. However, you will receive a unique code so that you are not wrongly billed for items you did not buy.
You can even use Google Pay, Apple Pay, or Samsung Pay to make contactless payments, just like Tap and Go. Simply download the app, link your credit card, authenticate with your fingerprint or PIN, and tap your phone on the terminal to pay.
A fintech company in Singapore called soCash has collaborated with HAO Mart to provide cardless cash withdrawals. soCash has also tied up with banks like POSB, DBS, and Standard Chartered Bank to offer ATM-free access to money across the country. Currently, the local company has expanded its reach and partnered with U Stars Supermarket, SPH Buzz, iECON stores, 7-Eleven, and U-Mart.
All you need to do is download the soCash app and enter the amount you want to withdraw from your credit card. You can easily collect this cash from over 1,000 locations instead of waiting in line in front of an ATM.
Credit Cards to Pay for Transport Fares
Commuters can use their Mastercard credit cards to pay for train and bus rides. The Land Transport Authority (LTA) partnered with Mastercard to launch a pilot account-based ticketing system. So, instead of using EZ-Link cards or NETS, you can tap your credit card to pay for the rides.
This system was introduced on 20 March 2017. Banks like POSB allows you to register your Mastercard credit card and be a part of this pilot system. The programme is still been tested and if it’s successful, then Singapore will join London and Sydney in implementing contactless payments on the transit system.
CardUp is an online payment platform that allows you to pay through your credit cards, even to recipients who do not accept card payments. You can use this app to pay your house rent, taxes, tuition fees, and insurance premiums. You can even earn reward points, cashback, and miles on your payments. Recently, CardUp raised S$2.2 million to expand its business and help small and medium enterprises get more out of their credit cards.
Simply download the app, sign up, schedule a payment, and CardUp will debit the amount automatically 5 days prior to the due date. The air miles earned on your payments can be used to redeem a business-class flight ticket to Bali, Hong Kong, Bangkok, London, Paris, and New York, among others.
Magnetic Secure Transmission (MST)
Magnetic Secure Transmission emits a magnetic signal from your phone to the terminal’s card reader. Like NFC, this technology is accepted at almost all payment terminals. Just hold your device an inch away from the terminal to pay the merchant. Your payment and transaction information is kept private with the help of tokenization. Unlike NFC technology, MST accepts payments of any value, based on your credit limit.
Non-cash payments are increasing every day. The reason is not just marketing strategies of banks, but also government initiatives and consumer behaviour. Both consumers and merchants prefer the convenience and speed of contactless payments.