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Tuesday, 30 November 2010

ST Forum letter: "Cashless payment: Pro-active examples IDA should copy"

Not going to ramble much on this because the issue was never followed up by the relevant authorities. They were probably glad that it was all "hot air".

IDA should enforce Cepas compliance, not leave it to the market Cashless payment: Pro-active examples IDA should copy

I refer to Last Saturday's reply by the Infocomm Development Authority's (IDA) reply on e-payment adoption (Ms Jennifer Toh, "Working towards complete cashless convenience"; Saturday) on e-payment adoption was puzzling.

(new paragraph) She said The IDA states that card issuers and merchant acquirers require a business agreement to enable terminals to accept all Contactless ePurse Application Standard (Cepas) cards.

(new paragraph) This means that business entities businesses have effectively hijacked been allowed to hijack a customers' customer's choice of which Cepas card to use.

I find this response to be bewildering. On one hand, So while the IDA says it wants to promote an e-payment culture. On the other, it appears to be taking a "hands off" approach in the process. This Such an attitude actually hinders true competition in the e-payment market, even though it reeks of government heavy-handedness.

When the local telecommunication market was liberalized liberalised, IDA required all telcos to ensure that subscribers from to one telco could contact those from rival telcos seamlessly. It imposes imposed stiff penalties if telcos do did not meet this requirement.

If the telco market had followed what is required for Cepas cross-acceptance, subscribers would need to have their own private agreements to contact family or friends who use subscribe to other telcos!.

Another example of how government intervention leads has led to improved market fairness is the Media Development Authority's (MDA) new stance on set-top boxes.

(new paragraph) MDA will soon require programming from any provider providers to be available on any set-top box. This is regardless of whether the customer has subscribed with to SingTel or Starhub.
(new paragraph) Customers thus benefit from more programming options and lower costs of acquiring set top boxes. They are also freed from being subject to their content provider's whims and fancies.

I urge IDA to should learn from its telco liberalization liberalisation experience and MDA's set-top box policy in promoting e-payment with Cepas cards.

To that end, I suggest a carrot-and-stick method to ensure a level playing field.

- (new paragraph, removed bullet point) Carrot The carrot: provide Provide subsidies for Cepas equipment makers who that ensure acceptance for of all Cepas cards (EZ-Link ez-link, Nets Flashpay, etc and so on).

- (new paragraph, removed bullet point) Stick The stick: penalize Penalise card issuers and merchant acquirers who that restrict customers to using Cepas cards from only one issuer.