The Acceleration of Real-time Payments in Singapore

Fatihah Ramzi, DigitalCFO Asia | 29 July 2022

Adrian Bugaian, Delivery Partner at Endava

Many people, businesses, and financial institutions now expect to be able to pay friends and customers, settle accounts, and transfer money at the drop of a hat thanks to the widespread use of real-time payment systems around the world. Although the idea of “paying immediately” is not new—cash is, after all, an instantaneous payment transaction instrument—the development of “real-time payment” choices has helped customers adopt a new standard.

Traditional payment methods like checks, credit cards, debit cards, prepaid cards, and the like are changing as a result of this new standard since consumers now generally anticipate quicker settlement times, notifications, and unified reporting. To find out more about this, DigitalCFO Asia spoke with Adrian Bugaian, Delivery Partner at Endava to learn more about the evolution of real-time payments, its trends and how youths will be impacted by it. 

The Evolution Of Real-Time Payments 

Endava’s current focus is heavily on the Asia Pacificlandscape with official offices located in Singapore, Malaysia and Australia. The company also has intentions  to continue expanding in the region. Real-time payments have been around the block for a number of years and Endava has been part of the real-time payments’ growth in the Western landscape before moving into SEA. Many of the payment technologies that can be found in the market are powered by Endava and the company has also developed infrastructure for their partners in the industry.

Real-time payment rails are the foundation upon which businesses are able to build a variety of services on top of. Primarily, they give both parties of a transaction the   certainty in knowing who they are paying and that the payment is immediate. Endava sees the real-time payments industry evolving into an extremely dynamic environment, especially in FinTech after the pandemic. COVID-19 is a factor that helped companies to accelerate their digital offerings to facilitate the changing perceptions of payments and interaction with end-users. 

“We see more and more value-added services built on top of real-time payments. One of the best examples in Singapore is payment applications in smartphones, particularly how they utilise QR code payments,” says Adrian Bugaian, Delivery Partner at Endava.

This is the evolution that real-time payments is bringing in and propelling into the future. The thing that consumers want is a one-stop shop for all of their needs. They do not want multiple applications on their phone to make different payments. The rails of real-time payments are already built and are continuing to evolve. Endava, being a digital acceleration company, helps to build not only the rails but the value-added services onto them. 

“Our success relies a lot on our clients’ success. Unless they are successful, we are not successful.,” comments Adrian Bugaian, Delivery Partner at Endava.

A great development in real-time payments is the cross border payments between Thailand and Singapore, PayNow. This was achieved because the underlying technologies for this particular system were built by the same technology used in real-time payments. Interestingly, during the conceptualization of payments systems such as this, no one really expected just how big the benefits would be outside of the convenience aspect. 

Real-time payments systems have helped governments in the optimization of their resources expenditure and has even helped consumers to understand even better how they use their money. Technology is accelerating at such a rate where one day, cross border payments are going to be the norm and it is going to be as simple as making payment transactions locally. 

Reasons Why Digital Security Is The Highest Impacting Factor On Digital Adoption

Digital security is by far the biggest concern that many technological companies have. At the beginning of the pandemic, Endava noticed that many companies stopped spending money as there was so much uncertainty about their future. Companies wanted to stop spending and sit on the cash that they have instead of incurring additional expenses that may become greater liabilities. On the other hand, some of the more future-thinking companies realised that this was the best time to invest in and revise their digital strategy. In upgrading their technological infrastructure, they hoped that digital acceleration would help to achieve their business goals despite the economic downturn. 

For companies that chose to allow their technological systems to remain embedded in legacy infrastructure, most if not all realised that they were being left behind as their competitors moved forward by turning towards digital solutions. This encouraged them to liaise with technology companies to remain competitive in the digital race. Tech companies like Endava helped these companies build a digital strategy that allowed them to keep up with digital adoption by also reinforcing focus on digital security. A small misstep could be detrimental to the company’s reputation. 

Digital security became a big threat because; 

  1. How was the system built and was it built in a secure manner? Technology companies have the expertise and experience to  help businesses design such systems, or can help to perform an audit so that companies know where their digital flaws are. This can also  help businesses realise the solutions they require. 
  1. Applications might not be well-programmed for limitations nor alternative use cases. As soon as auser steps away from the primary use case the application was meant for, errors abound and systems could be incapable of rectifying the problem. This  happens especially if the system was not designed in a manner that placed security first. 

One particular cybercrime is a growing concern for technology service providers in Singapore – phishing. Phishing is not just about stealing pieces of data, in particular, personal information, but making use of this intel for other fraudulent activity online. Such crime is becoming increasingly abundant as more businesses are digitalising at a pace never seen before. Without the right technology partner, businesses will not be able to keep their consumers’ data safe. 

“We have this saying in Endava – “Think at least twice before you click”, and that applies to everything from an email, to a word document, to a link.”

Adrian Bugaian, Delivery Partner at Endava

To ensure digital security, companies will need to work closely with their security team and not in silos. They will also need to have a trusted partner that can step in to provide expertise and second opinion where required. If companies rely on vendors or companies that have successfully built multiple systems around the world, these vendors can specifically pinpoint what needs to be done to enhance the systems. 

Another thing companies need to look at is their digital strategy. They need to ensure that their digital strategy is flexible such that alterations can be made in an agile and iterative manner without great disruptions to processes and operations. Various parts of a digital security system must be flexible in a sense that they can be changed on the fly. The key to success is to have full autonomy over individual components, placing the system in an ever-evolving state to prevent it becoming obsolete.

Trends In Real-time Payments & Expanding Its Usability

The leading trend in real-time payments is still customer experience; even though the way individuals interact with technology is very much tangible, it is also sometimes unpredictable. The variety of people using real-time payments now is much bigger and will only continue to grow. In Singapore, the number of people using real-time payment transactions is around 10%, so customer experience is definitely on the top of the list. 

Open-banking is the second thing that is going to be fueled a lot by real-time payments. It helps change how the government and end-users perceive the movement of money. Payment systems in your phones are not possible without the rails of real-time payments. If an individual wants to move their money from one account to another and they want it immediately, only real-time payments can help. Otherwise, it is not an actual transfer of funds. Fortunately, because Singapore did not have many legacy systems in place with regards to old payment methods, newer systems could be implemented much more easily. This  allowed the country to move towards real-time payments much faster than other parts of the world.

Cross-border payments is definitely another up and rising payment system that will continue to grow in the near future especially in the post-pandemic world. In order to transfer money to banks in another country, you will need to use an intermediary like Western Union and it is a very traditional, time-consuming process. With cross-border payments, people are able to do it instantly. 

Impact Of These Trends On Youths In The Next Few Years

“We see a positive trend in the interest of technology among the youths. This is because technology is becoming omnipresent – technology is everywhere,” says Adrian Bugaian, Delivery Partner at Endava.

Even day-to-day, people are surrounded by smart devices all the time, be it their smartphones, televisions and even kitchen appliances. Particularly for the younger generation who  grew up surrounded by technology, the term ‘digital native’ could not describe them better. It then comes as no surprise that youths are more inclined towards creating and innovating digitally in areas that past generations never foresaw could host potential problems. Eventually, they will be the ones to make the predictions with the foresight that their predecessors  are not able to have. There will be a continued growing interest in technology due to the beauty of what technology can do for them and children younger than them.