Electronic Payment Methods in Singapore

In early days when a credit card was used to make a payment, the card was "swiped" so the embossed card numbers could be printed on the bill. The customer signed on the bill. Later the shop sent the bill to his bank to collect the money. This is a kind of manual work. Today almost all Point-Of-Sale counters have a machine to read the magnetic stripe of the card. The card numbers and sale amount are sent to the acquiring bank in real time, then an authorization code is returned (if the transaction is approved). The customer's signature is still required. Needless to say, this electronic method is much safer than old day's manual job.

There are two widely accepted credit card types: Visa and Mastercard. Nearly all POS that accept the one accommodate the other. Some shops also accept Amex, Jcb, Diner's Club cards. But I never had one. Besides Visa and Mastercard credit cards, banks also issue Visa and Master debit cards. These kinds of debit cards are used the same way as Visa/Mastercard credit cards, and at the same commission rate. The only difference lies in that by using credit card the customer is borrowing from a bank, but the debit card is deducting his own money. To issue a credit card, the bank should check if the customer is credit worthy. But to issue a debit card, it is of no risk. So Singapore banks are aggressively promoting debit cards. The traditional ATM debit cards are being replaced by "enhanced" Visa or Master debit cards.

There exists another debit card electronic payment system owned by three local banks. It is called NETS - Network for Electronic Transfer Singapore. NETS includes 3 local banks and only one foreign bank - Standard chartered bank. Its fee rate is much lower than Visa/Master. So small shops and the government prefer to NETS. At POS, the money is pulled out directly from a current/savings account. It involved no loan. But NETS does not include other foreign banks. In 2010, two big foreign banks, Maybank and Citibank, jointly launched a NETS-like debit payment system: EPINS. It's really a result of monopoly and waste of resources. In Australia, such system is call EFTPOS. In Canada, it is called Interac. Banks, no matter it is local or foreign, all join the system.