PayNow: An in-depth guide


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  1. Introduction
  2. How does PayNow work?
  3. How is PayNow used?
  4. Benefits of accepting PayNow
  5. PayNow security measures
  6. Accepting PayNow as a payment method
  7. Alternatives to PayNow

PayNow is a digital payment service the Association of Banks in Singapore introduced in 2017 to streamline payments. The service allows customers to transfer funds instantly using their mobile number, Singapore National Registration Identity Card (NRIC) number or Foreign Identification Number (FIN), eliminating the need to input the recipient's bank account details. Once users have linked their mobile number, NRIC number or FIN to their bank account, others can send money directly to their account using only that identifier.

PayNow is a unified approach to digital payments in Singapore, integrating with the banking systems of a wide range of banks. These banks include DBS/POSB, OCBC Bank, UOB, HSBC, Maybank, Standard Chartered and Citibank. PayNow is accessible to most bank account holders in the country, and money is sent and received through banks' internet banking sites or mobile banking apps.

The Monetary Authority of Singapore (MAS) supports this service as part of Singapore's broader effort to advance towards a cashless society. PayNow operates 24/7, allowing for immediate transfers at any time, and relies on the security measures of participating banks to protect transactions.

Below, we'll cover what businesses must know about working with PayNow as part of their payments strategy in Singapore.

What's in this article?

  • How does PayNow work?
  • How is PayNow used?
  • Benefits of accepting PayNow
  • PayNow security measures
  • Accepting PayNow as a payment method
  • Alternatives to PayNow

How does PayNow work?

PayNow is a real-time funds transfer service that lets users in Singapore send and receive money instantly. Here's a step-by-step look at processing payments via PayNow.

  • Registration: To use PayNow, a person registers with their bank. They link their mobile number, Singapore NRIC number or FIN to their bank account via their internet or mobile banking app. Once registered, the mobile number, NRIC number or FIN acts as an identifier for others to send money to their account.

  • Sending money: To send money, a person logs in to their bank's mobile or internet banking app, then selects PayNow as the transfer method. The sender can input the recipient's mobile number, NRIC number or FIN, or scan a QR code linked to the recipient's bank account. After the sender has entered the amount and confirmed the transaction, the money is transferred instantly. For added security, the sender must confirm the recipient's name before the transaction is processed.

  • Receiving money: The recipient gets the money in their linked bank account. The transfer is automatic and immediate, and it requires no action from the recipient, who will usually receive a notification from their bank confirming the transaction.

  • Business payments: Businesses use PayNow differently. They register using their Unique Entity Number (UEN). Customers can make payments to businesses by entering the UEN or scanning the PayNow QR code provided by the business.

  • Transaction limits: Though PayNow is available 24/7, including bank holidays, PayNow transactions are subject to limits set by a person's bank. These can vary depending on the bank.

How is PayNow used?

PayNow is primarily used in Singapore, where it has become a popular method for digital transactions. Its monthly transaction value exceeded 7.6 billion Singapore dollars (SGD) in 2021. PayNow's ease of use, speed and integration with major banks have made it a versatile tool for a wide range of personal, business and government transactions. Here are the most common scenarios in which PayNow is used:

  • Personal transactions: People often use PayNow for peer-to-peer money transfers. It's convenient for splitting bills, sending gifts or reimbursing friends and family. Because it requires only a mobile number, NRIC number or FIN to send money, it simplifies the process of transferring funds.

  • Business transactions: PayNow is also widely used by businesses. Brick-and-mortar businesses can receive payments from customers using a PayNow QR code. This is particularly useful for small businesses, retailers and service providers that want a simple and fast way to accept payments without handling cash or processing card payments. Online businesses and service providers also often offer PayNow as a payment option. Customers can pay for online purchases by scanning a QR code, entering the business's UEN or providing the business's linked mobile number.

  • Government payments: PayNow is also used for transactions involving Singapore government services. Some government rebates, grants or refunds are disbursed to citizens via PayNow, streamlining the process of government-to-person payments.

  • Charitable donations: Non-profits and charities in Singapore use PayNow to receive donations. Donors can transfer funds using the organisation's UEN or a QR code.

  • Freelance and contract payments: Freelancers and contractors are often paid via PayNow, a prompt fund transfer option that removes the need to invoice through traditional banking methods.

  • Educational payments: Some educational institutions in Singapore offer PayNow for students to pay school expenses or donors to make donations.

Benefits of accepting PayNow

Businesses that accept PayNow may see these benefits for their operations and financial management practices:

  • Simplified transactions: PayNow simplifies the payment process with QR codes and UENs. This simplicity can enhance the customer experience, potentially increasing sales and customer satisfaction.

  • Instant payments: With PayNow, businesses receive payments instantly, improving cash flow and agility in financial planning.

  • Reduced costs: Transaction fees for PayNow are typically lower than credit card processing fees, though fees vary depending on the bank and type of business account. Some banks offer PayNow services with no transaction fee or a nominal charge per transaction. PayNow also decreases the need to handle cash or process cheques, which can lower costs associated with these activities.

  • Lower risk: PayNow transactions use the strong security systems of online banking and are less risky than cash or cheque payments, which are more subject to theft, loss and fraud.

  • Simplified payment reconciliation: For businesses, reconciling payments can be time-consuming and error-prone. PayNow simplifies this process by instantly recording each transaction for easy tracking through bank systems.

  • Broader customer base: Because PayNow is available to anyone with a bank account in Singapore, it lets businesses access a broader customer base. This can be especially beneficial for small businesses trying to expand their market reach.

  • Business-to-business (B2B) relationships: PayNow can facilitate smoother B2B transactions by allowing businesses to pay suppliers or service providers instantly, strengthening supply chain relationships and potentially generating more favourable terms.

  • Digital accounting integration: Businesses can easily integrate PayNow transactions into their digital accounting systems, simplifying financial management.

  • Automated payments: With PayNow, businesses can automate certain aspects of their financial operations, such as recurring payments.

PayNow security measures

PayNow incorporates several security measures to protect the safety of its transactions for people and businesses. These measures, outlined below, protect against unauthorised access and fraud.

  • Bank security protocols: PayNow uses the security frameworks of participating banks by processing all transactions via online banking portals. These security protocols are comprehensive, involving encryption and secure channels to protect data during transmission. PayNow relies on these protocols during the account registration process and while facilitating transactions. When a person first links their mobile number, NRIC number or FIN to their bank account to use PayNow, the bank platform secures the process.

  • Two-factor authentication (2FA): 2FA is a standard practice in banking operations. When you perform a transaction using PayNow, you're often required to authenticate the transaction using 2FA. This could involve a one-time password (OTP) sent to your mobile phone or generated through a hardware token, or biometric authentication such as a fingerprint or facial recognition.

  • Payment verification: Before the transaction is completed, PayNow shows the name registered with the recipient's listed mobile number, NRIC number or FIN. This feature allows the sender to verify that they are sending money to the right person.

  • Transaction monitoring: Banks continuously monitor PayNow transactions for unusual or suspicious activity.

  • Regulatory compliance: The banks that participate in PayNow adhere to stringent regulatory requirements set by financial authorities such as the MAS. These requirements include regular security assessments and updates to ensure that the system remains safe against emerging threats.

  • Transaction limits: Banks each assign specific limits to PayNow transaction amounts. These limits protect against large fraudulent transactions. At OCBC Bank, for example, daily PayNow transaction limits are set at $1,000 SGD. At UOB Bank, users can make PayNow transfers up to a cumulative daily limit of $20,000 SGD. At DBS Bank, the cumulative daily transaction limit for PayNow is $1,000 SGD – larger transactions must be signed with a digibank token for additional authentication.

  • Customer communication: Banks often provide educational materials and alerts to customers about how to secure their accounts and stay vigilant against scams.

Accepting PayNow as a payment method

Businesses in Singapore interested in accepting PayNow payments must complete these steps and meet the requirements:

  • Singapore registration: To accept PayNow, the business must be registered in Singapore with a valid UEN. This applies to businesses based in Singapore and foreign businesses conducting business in Singapore. The latter must be incorporated in Singapore with a valid UEN to register for and accept PayNow payments.

  • Valid bank account: Businesses must have a business bank account with one of the banks in the PayNow environment. Foreign businesses must have a business account in Singapore dollars to use PayNow.

  • Registration: Businesses must register for PayNow Corporate with a participating bank or non-bank financial institution. This is typically done through the bank's online business banking portal or business mobile banking app.

  • Payment identifier: During registration, the business will link its UEN to its bank account. This UEN will be used as the identifier for customers to make payments. Businesses can also choose to generate a PayNow QR code, which they can display at the point of sale or include on invoices. Customers can pay by scanning this QR code with their bank's mobile app.

  • Terms and conditions: Businesses must comply with the terms and conditions set by their bank for using PayNow Corporate, and those may include transaction limits or fees.

  • Security protocols: Businesses accepting PayNow must follow relevant security protocols to protect their transactions and customer data, in line with the Personal Data Protection Act (PDPA) in Singapore.

Businesses not based in Singapore may choose to accept PayNow payments through a service such as Stripe. Using any payment service entails compliance with all terms of service and internal policies. With Stripe, this includes complying with Know Your Customer (KYC) requirements and Anti-Money Laundering (AML) regulations, which can involve providing business details, ownership structure and bank account information. Though each service will have its own setup, here is the process to set up PayNow via Stripe, as an example:

  • Registering for an account: Businesses must register for a Stripe account and confirm that Stripe supports their country.

  • Integrating the Stripe system: Businesses must integrate Stripe's payment processing system into their website or e-commerce platform. Stripe provides application programming interfaces (APIs) and other tools for this integration.

  • Setting up payment methods: Businesses can configure their accepted payment methods within the Stripe Dashboard. Including PayNow will allow customers in Singapore to choose PayNow at checkout, where they'll be presented with a QR code generated by Stripe that they can scan with their bank app. Alternatively, they can use the provided UEN to make the payment.

  • Processing transactions: Once the customer has completed the payment via their bank's PayNow interface, Stripe processes the transaction and credits the funds to the business's Stripe account. Stripe will then settle the funds into the business's designated bank account, which does not need to be in Singapore. Businesses using Stripe to accept PayNow payments in Singapore will incur a processing fee of 1.3% of the transaction value.

  • Converting currency: Stripe can convert payments to your local currency, which will incur conversion fees. Businesses should pay careful attention to the currency in which they're receiving payments and what the conversion fees are.

Alternatives to PayNow

Businesses operating in Singapore have several alternative options to PayNow, each with their own set of features and primary use cases. These alternatives include:

  • Network for Electronic Transfers (NETS): NETS is a widely used payment method in Singapore that enables immediate electronic transfers. NETS is more commonly used for point-of-sale (POS) transactions using NETS cards, while PayNow is used for mobile and online transfers using mobile numbers or NRIC numbers.

  • Fast and Secure Transfers (FAST): FAST provides immediate interbank transfers in Singapore. Though PayNow can use mobile numbers or NRIC numbers for transfers, FAST requires bank account details.

  • SGQR: SGQR is a payment system that creates a unified payment QR code. Using this code, customers can pay with multiple methods, including PayNow.

  • Credit and debit card payments: Credit and debit card payments are another electronic payment method widely accepted in Singapore. Card payments often involve higher fees for businesses and require physical or virtual card details rather than the simpler proxy identifiers (such as mobile numbers) used in PayNow.

  • Digital wallets (e.g. GrabPay, Singtel Dash): Digital wallets such as GrabPay and Singtel Dash are another contactless, mobile-based payment option. Unlike PayNow, which integrates with multiple banks and doesn't require an app, these digital wallets are closed systems and require both parties to have the app to complete transactions.

  • Bank transfers: Online bank transfers are another way to move funds directly between bank accounts like PayNow does. These transfers may be slower than PayNow's instant payout process and require the recipient's bank account details to be completed.

The content in this article is for general information and education purposes only and should not be construed as legal or tax advice. Stripe does not warrant or guarantee the accurateness, completeness, adequacy, or currency of the information in the article. You should seek the advice of a competent attorney or accountant licensed to practice in your jurisdiction for advice on your particular situation.

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