Three Brides For Three Grooms
(for MediaCorp 938LIVE’s Money Talks on 12 July
If you leave home without your phone, would you go
back and get it? Yes. Most of us would. But if you leave home
without your wallet, would you go back and get it? This time,
studies show that only some of us would.
Studies also show that we are twice as likely to carry our
mobiles as we are to carry our wallets. Logic says that we
should combine the two together.
The attraction is that so many of us, even children, now own
mobile phones. Does this mobile and wallet combination
exist? “Yes”. But not yet in Singapore.
Outside Singapore, a few such mobile and wallet
combinations, also known as mobile payment systems, are
currently being tested. In Japan, you can use your mobile to
buy a train ticket, pick up a newspaper and grab a cup of
coffee with just a wave of your mobile across a scanning
Japan’s mobile payment system does not depend on
cutting-edge technology. It’s the same technology we already
use in our EZLink cards.
But mobiles can be more than just another EZLink
device. Using the screen and keyboard, mobiles can also be used
to authorise larger payments by entering PIN codes. In its
developed form, it could be used as a credit card and to
transfer money between bank accounts.
Test runs in Kenya and South Africa, where most people
do not have traditional bank accounts, have so far proved very
To send and receive money, all you need is a secret
code, the SMS facility, a virtual bank account, and registered
agents on both sides.
When such a mobile payment system is introduced in
Singapore, and the commissions are low enough, many retailers
will embrace it. This could undermine the profits of existing
electronic payment systems.
The introduction of a mobile payment system into any
country is normally seen as a threat to the banks. Banks could
lose customers if payments made by mobiles do not appear on
their monthly bank statements, but on those of the
In theory, telcos could evolve into banks. But telcos
might not want to deal with large financial transactions. It
would also require telcos to take on risk management and offer
banking services. They might not want to do that too.
But if telcos are happy to do it, and banking licences
are given to them, imagine the impact on the stock prices of
banks and telcos. In this new scenario, many permutations are
possible. Telcos could compete or team up with
So the next wave of merger activity in the Singapore
banking scene may not be between banks. Looking at the lighter
side of it, it could be the ideal marriage between three grooms
and three brides. The three grooms are the banks, because,
traditionally, they have the money. And the three brides are
the telcos, because, traditionally, they love to talk.
Jokes aside, a mobile payment system would give the
Singapore economy another cutting-edge advantage. But it has
its downsides too. What is good for one may not be good for
For instance, an outlaw fleeing the country would be
able to transfer millions of dollars in an instant, just by
using his mobile and PIN code. But the public might not want
him to do that. At least, with a mobile payment system, the
outlaw could transfer the money himself, and not involve any of
his relatives. This would spare his relatives the inconvenience
of facing a potential jail term.