Sunday January 7, 8:17
PM
Banks, transport
companies work to tap cashless payment market
SINGAPORE: Public transport companies are establishing partnerships
with banks in an effort to boost commuter numbers on buses, trains
and taxis.
The companies aim to tap on the multi-million dollar cashless
payment market.
Some two million passengers ride on the train, taxi and bus
networks each day.
Apple Lee takes a cab at least seven times a week. Her credit card
company, ABN AMRO, has just tied up with taxi company,
ComfortDelGro, to scrap the 10 percent administrative fee that
customers have to shell out when they use their credit cards to pay
the taxi fees.
Ms Lee says it is an ideal option unless she is rushing for time as
that would mean she has to spend extra minutes waiting for the
transaction to be processed and to sign on the charge slip.
ABN AMRO wants to increase its credit card business by grabbing a
slice of a market estimated to have grown 30 percent a year for
ComfortDelGro for the past 10 years.
The business is said to be worth S$35 million last year.
Pamela Tan, Head, Consumer Finance, Consumer Client Segment, ABN
AMRO, says: "With the partnership with ComfortDelGro, we will be
able to bring in another 20,000 new customers. I believe we are
projecting a minimum of 20 percent incremental in terms of revenue
this year."
But the market potential is bigger. Credit card Mastercard says
payment for transportation currently represents a small proportion
of money spent on its card. The company adds that this means cards
have a huge opportunity to expand because two years ago,
Singaporean consumers spent S$14 billion on transport.
And banks are not just working with taxi companies.
Train operator SMRT wants to get more people onboard its trains and
taxis by working with Citibank.
They have introduced a Citibank EZ-Link card which offers cashless
payment for SMRT train and bus rides.
In turn, the bank gets access to strategic location of train
stations where it plans to build 10 branches in places like Ang Mo
Kio, Tampines and Jurong.
Chan Sow Han, Marketing Director, Citibank Singapore, says: "SMRT
has the largest network of train stations and these stations are
spread throughout all the 51 stations. This gives us natural access
to the commuters out there."
Teo Chew Hoon, Vice-President, Commercial Business, SMRT
Investments predicts the venture will help generate at least 20
percent of revenue for SMRT.
The train operator hopes the partnership will also help to boost
the falling number of public transport users.
Ms Teo says: "The convenience, as well as the added value, would
encourage the public to use public transport."
Predictions show this market is going to expand, with benefits for
both businesses and savvy credit and debit card users.
CNA/so