Contactless mobile payment systems far from changing the way we pay

Photo credit: Trak.in

A list of NFC contactless mobile payment systems have emerged in Singapore. We now see international giants like Samsung, Apple, Android offering their “Pay, Pay and Pay” apps (could someone create a ‘Don’t Pay’ app instead?) Local banks and telcos are also cashing in on the trend, and we can now use apps like UOB’s Mighty and Singtel’s Dash to pay, instead of using the traditional plastic credit/ debit cards or stored value cards.

As a tech geek whose faithful companion is his Samsung S7 Galaxy Edge, I would like to trim the fat off my wallet, chucking out unnecessary credit and stored valued cards, and instead e-carrying them on my smartphone. Heck, I would ditch my wallet if I could.

So when Samsung Pay appeared, could it finally be the day I say adios to my plastic cards and downsize to carrying my phone and a money clip?

I am a bank’s typical customer profile

Singapore has a total of 8m primary-holder credit cards in circulation, and 1.48m people earning above a monthly $2,500 wage eligible to be a primary card holder. This translates to an average of 5.4 credit cards that a primary card holder has.

As a Singaporean reaching his 40s, I fall under the “family” category, who has a household and uses credit cards to pay for necessities like groceries, petrol, education and medical expenses for the family. We also use credit cards to pay for shopping, online shopping, dining and travel.

Sounds like a prime candidate for banks and mobile payment systems? They love when people like me use a credit card to pay a puny $2 for a bunch of bananas at the supermarket.

In reality, the banks hate me.

Why? Because I also fall under the “uncle and auntie” category, where I religiously read in detail about which credit cards award me with the largest rebates. I proudly calculate and see myself earning back the 2-3 percent, where banks earn an average of 1.8 percent transaction fee on traditional retail POS systems. I also ensure I have loyalty cards to earn further rebates to get the most bang for my buck.

Consumers are getting smarter, and are more selective in the way they spend. Like me, they will likely have multiple credit cards from various banks to achieve the best yield of rebates and cashbacks.

It ain’t easy integrating banks and card associations

This means that any mobile payment system should have as many card-issuers on board their platform. I have consolidated my spending into three credit cards from three different banks.

For simplicity’s sake, the OCBC 365 card is used for petrol, groceries, dining and medical expenses. The Citi Rewards card is for clothes and shopping at departmental stores, and the UOB Prvimiles is for everything else to collect air miles. The Passion and Plus! Cards are the membership cards of two major local supermarket chains in Singapore, and offer rebates when used at the respective chains. The Passion card also acts as a stored value card for public transport.

The smartphone that did not make me look so smart

Android Pay – so what?