Singapore advances towards the next generation of mobile payment models-

Singapore has one of the most advanced public transport ticketing systems in the world. The magnetic ticketing system used in the 1990s evolved into an electronic fare system based on contactless smart cards in the early 2000s, which has changed to the current interoperable system. TransitLink Pte Limited, a subsidiary of the Land Transport Authority (LTA), operates and manages the system.

Overview of current operational automated fare collection (AFC) systems

The fare system in Singapore has evolved from a single-mode to a multimode ticketing system, and then from a multi-purpose, single-issuer card system to a multi-purpose, multi-issuer system. The contactless smart card, the Sentosa pass, enables one to travel on the Sentosa Express and allows for admission to Sentosa Island. While single-trip tickets can be purchased from ticket machines, reloadable contactless smart cards can be purchased from the TransitLink ticket office or from passenger service centre counters located at MRT stations. The mass rapid transit (MRT) and light rail transit (LRT) stations have card readers mounted on the fare gates. Buses have card readers mounted at entrances and exits.

EZ-link card: The “star” in Singapore’s interoperable AFC system

The EZ-link card (pronounced “easy”) is a multi-purpose, stored-value card used for micro-payments, including transit (bus, MRT, LRT), taxi fares, parking, and retail transactions. It can be loaded with one-time travel tickets, tourist passes, as well as student and senior citizen concession passes. It also serves as a supplementary identification and discount card for students in nationally recognised educational institutions, senior citizens, as well as full-time employees of the Singapore Armed Forces, Singapore Civil Defence Force, and Singapore Police Force. The card is managed by EZ-Link Pte Limited, a wholly owned subsidiary of the LTA of Singapore.

The card, based on Japan-based Sony’s FeliCa technology, uses the Symphony for e-Payment (SeP) system that is compliant with the Singapore Standard for Contactless ePurse Application (CEPAS). The system is capable of clearing 20 million transactions in a day and the card can process 500 online transactions. The online enquiry response time is less than 0.3 seconds. The card does not require a travel deposit. Commuters have full use of the stored value of the card for transit and non-transit purposes.

CEPAS is jointly developed by the Infocomm Development Authority (IDA), LTA, and the payment cards industry. Based on open standards, it allows for the interoperability of various multi-purpose stored-value card payment schemes.

Collaborative development of a mobile payment network

Singapore has successfully built a secure mobile wireless payment network based on near-field communication (NFC) that can process credit card payments and CEPAS e-payment services with EZ-link cards.

Call for CFC: In November 2010, the IDA issued a call-for-collaboration (CFC) to companies for the development of next-generation trust third-party (TTP) infrastructure to be used by all banks, transport operators, and other service providers to deliver NFC services. In December 2009, the government extended a grant of S$16 million to subsidise the cost of deploying contactless card terminals borne by local merchants. The aim was to quadruple the installed base of contactless point-of-sale (POS) terminals to almost 24,000 in 2011 from 5,000 in 2009.

CFC contract award and status: In October 2011, the CFC was awarded to a consortium comprising seven companies – Gemalto Pte Limited, Citibank Singapore Limited, DBS, EZ-Link, M1 Limited, SingTel Mobile Singapore Pte Limited (SingTel), and StarHub. Gemalto is developing and operating the TTP infrastructure. DBS, EZ-Link, and Citibank will provide a wide range of stored-value payment products to be stored in the chips of mobile phones by using NFC-SIM card from SingTel.

In August 2012, EZ-Link and SingTel launched the mobile payment service for NFC-enabled smartphones, which is accepted at over 20,000 points including taxis, supermarkets, and fast food chains.

NFC trial 2007: In October 2007, around 1,000 customers participated in a six-month trial of NFC services. Users could tap their phones to make payments on 20,000 EZ-link terminals. It was the largest trial of its kind in the world and the first public trial in Singapore. The results were encouraging: around 68 per cent of the respondents said they would be “likely” or “very likely” to adopt the new technology. Furthermore, the majority stated that they would be willing to pay a slight premium for the NFC chip in their phones. About 83 per cent of the respondents used their phones during the trial to pay transit fares, while 70 per cent checked their transaction histories. Only 20 per cent reported making retail purchases with the phones.

NFC trial 2010: In December 2010, an initial trial of mobile payments was launched, with EZ-Link, MasterCard, DBS, and StarHub Mobile Pte Limited (StarHub) working in collaboration. About 1,000 DBS and EZ-Link FEVO MasterCard cardholders could use their existing StarHub mobile phones to make payments. France-based Gemalto equipped the NFC device with Upteq N-Flex that has the following technological features:

  • Functions on multiple mobile handsets;
  • Supports MasterCard PayPass – a contactless payment feature that enables payments with the tap of the card/mobile phone on a POS reader; and
  • Conforms to the Single-Wire Protocol endorsed by the GSM Association.

Mobile app: The EZ-link mobile application (app) can be downloaded from the Google Play store for usage on NFC-enabled Android mobile handsets. The app has the following features for all customers:

  • Check transaction history and balances;
  • Top-up the e-purse with any debit/credit card;
  • Sign up for Activate!;
  • Offer a complimentary EZ-link programme
  • Block the e-purse and make refunds in case of the loss of the phone.

It also allows SingTel customers to top up on the go by using their NFC-enabled phones.

The next generation of smartcards

Singapore’s future plans mainly involve seamless NFC operations and an innovative dual-currency card as explained below.

NFC ticketing: The IDA plans to encourage more banks and card issuers to connect to the TTP infrastructure and engage value-added service providers to develop NFC-enabled mobile services, such as rewards, loyalty, and ticketing. There are also plans to reduce redundancies among multiple operators via cloud computing. Once operational, the service provider will have to keep the service running in the same format of NFC till 2017.

Cross-country SINO Visitor pass: In August 2013, EZ-Link Pte Limited entered into a partnership with China-based Guangdong Lingnan Pass Company Limited (issuer of the Guangdong Lingnan Pass) to develop the world’s first cross-country dual-currency transit card – the SINO Visitor Pass. The card that will be delivered by Watchdata Technologies by mid-2014 will enable visitors travelling between the two cities to use a common public transportation fare card that can store value in the currencies of both the cities. It can also be used at over 100,000 retail locations.

After its launch, both partners will progressively add functions such as the reload of the EZ-link purse at Guangdong Lingnan Pass top-up terminals and vice versa. Subsequently, EZ-Link also plans to integrate its contactless e-ticketing technology into the card. There are also plans to extend the usage of the card to other cities in China.

Financing: Main barrier for large-scale roll-outs and seamless integration 

The NFC trials in ticketing had suffered from a lack of suitable contactless phone models. The earlier models that could embed the capability into the phone did not allow users to switch to their preferred handsets. In addition, NFC-enabled phones will not be used for electronic road pricing (ERP) and electronic payment system (EPS) for parking.

Going forward, the main barrier will not be technology. Rather, substantial financing will be needed to roll out new cards and terminals, as well as ensure the seamless integration of merchants and banks with the system.