20 cents to use PayNow? Shop's surcharge for cashless payments confuses customer

[UPDATE Aug 16]

The Association of Banks in Singapore (ABS) and its members have discouraged merchants from passing costs imposed by institutions to consumers, Ong Ai Boon, Director of ABS stated in response to queries by AsiaOne.

"As with any payment scheme, there are clearing fees associated to offset the cost of running the infrastructure," Ong explained. "PayNow participating institutions do not pass these costs to consumers, however, they may charge service fees to merchants for value-added PayNow services."

She added that the ABS is formalising PayNow scheme rules that aim to "prohibit such surcharges and provide the PayNow institution a right to terminate services if any merchants do not comply".

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It may be normal to pay a little more for convenience, but would you pay 20 cents just to make a purchase via PayNow?

Facebook user Nur Azah felt something amiss when she encountered a store that charges 20 cents to complete a cashless transaction in a post shared to Complaint Singapore on Wednesday (Aug 9).

"Is this 20-cent fee allowed for cashless payment?" Azah questioned in her post. "PayNow is free of charge, why do I have to pay money directly into your account?"

She added: "I don't think this is right, am I allowed to report? Who do I report to?"

In the picture, the shop's SGQR codes have been obscured by Azah but the requirements are clearly visible: 20 cents per cashless transaction which also includes Nets and PayLah!

She didn't indicate in her post where this store is located at. 

Netizens weren't too delighted by this, with one user saying: "Please report them. Can't stand this way of doing business."

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"Rubbish," another user said. "QR codes can be created and are free, [but you] still need to pay extra… don't buy a thing from them."

However, some netizens also gave a different perspective on the matter, claiming that business owners are charged per PayNow transaction.

"PayNow, PayLah — both have [costs]," a user on Facebook claiming to be a business owner insisted. "We do check our statement every month."

According to the Association of Banks in Singapore (ABS), there are currently 26 banks and major payment institutions taking part in PayNow.

Of them, some major banks, such as DBS, OCBC and UOB have waived PayNow fees for incoming transactions for retailers until the end of 2025.

Other — but not all — banks, such as Standard Chartered, HSBC and the Bank of China have not opted to charge for PayNow transactions as of yet.

The ABS has also stated that registration for SGQR is free. However, PayNow transactional charges and printing charges for SGQR labels may vary depending on the bank.

Small businesses reluctant to go cashless

Research manager at IDC Financial Insights Michael Yeo had said in a Today Online report back in 2017 that small businesses are reluctant to adopt cashless payments due to the costs involved.

"Reasons for this include the high merchant fees for cards — cutting into profits — the costs of setting up the POS (point-of-sale) system and maintaining it … The lack of acceptance of cards everywhere in turn means that consumers generally need to carry some amount of cash with them at all times for day-to-day purchases," he said.

ABS had previously said in a Lianhe Zaobao report in 2022 that the PayNow programme "neither requires nor encourages merchants to charge consumers additional fees for paying with PayNow."

"In rare cases, merchants charge administrative or processing fees in addition to the items purchased by consumers. These are all at the merchant's own discretion," ABS added.

They said that they would continue reviewing current practices and "consult closely" with the industry on training merchants and "making PayNow free for retail consumers".

AsiaOne has contacted the Consumers Association of Singapore, ABS and Nur Azah for comment.

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khooyihang@asiaone.com