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Digital wallet space heats up as Apple Pay makes Singapore debut

Apple has launched its much-awaited mobile payment and digital wallet service Apply Pay in Singapore with American Express.

In a statement, Apple said the service is available for eligible America Express-issued credit cards in Singapore, while some other banks such as DBS Bank, UOB and Standard Chartered will also provide the service in the coming months. Visa credit card customers too can avail the offering in a few months from now, according to its website.

As of now, participating merchants include NTUC FairPrice, Starbucks, Uniqlo and Din Tai Fung restaurant. In the pipeline are other brands such as Giant, Breadtalk, 7-Eleven, Cold Storge, Marketplace and others.

To pay customers need to simply hold their iPhones near the contactless reader with their finger on Touch ID. Or they can double-click the Home button when the iPhone is locked to access Wallet and quickly make purchases.

“Your card number is never stored on your device, and when you pay your credit card numbers are never sent to merchants. Apple Pay assigns a unique number for each purchase, so your payments stay private and secure,” Apple on its website says.

Experts are of the view that digital wallet space set to heat up. “There is further fragmentation expected in the mobile payments market and this means consumers can choose from a wider variety of digital wallet providers. Consumers stand to gain from the digital wallet war as providers compete for a greater share of the wallet,” Forrester researcher Zhi Ying Ng said.

Apple Pay’s adoption may not be as fast as expected, according to Ng. “The use of contactless card payments is increasing in Singapore, and consumers are comfortable with using it but there are significant barriers to consumer adoption of digital wallets today and it will take time before these wallets become more convenient for customers and they realise the benefits and additional value that digital wallets bring,” she added.

She also warned that financial institutions should not simply cede the digital wallet relationship to Apple Pay, but think carefully about the sources of value that a partnership will bring, and the terms that the partner offers.

According to Clement Teo, Forrester’s senior analyst the consumer adoption of Apple Pay will depend on the customer experience and how easy, effective and enjoyable it is to use it.

“Apple Pay will be a strong alternative to the Android ecosystem, which doesn’t look like it has strong uptake locally yet – the recent announcement by LTA for ezlink top-up is limiting,” he said.

Apple Pay increases the number of use cases for payments, offers a less fragmented OS ecosystem, and enlarges the pool of players in the payments ecosystem, e.g. credit card players are also partners. While it may not be the ultimate standard, it will be a major one for mobile payments – especially with the growing adoption of wearables like the Apple Watch, Teo explained.

 

 

 

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