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Guide To Payment Solutions You Need To Offer Your Customers In Singapore

The right payment solutions can boost your business cashflow, limit set up cost and effort, and provide convenience customers.


This article was written in collaboration with OCBC Business Banking. All views expressed in this article are the independent opinion of DollarsAndSense.sg based on our research. DollarsAndSense.sg is not liable for any financial losses that may arise from any transactions and readers are encouraged to do their own due diligence. You can view our full editorial policy here.

 

Apart from having a good idea and a viable business model, entrepreneurs also need to have a good grasp of the operational aspects of running their business.

This means negotiating rental space, hiring the right people, dealing with suppliers, as well as incorporating the right business entity, opening your business bank account, and many more things.

Read Also: Guide To Opening A Business Account For Your Start-Up In Singapore

You also have to do essential things that seem to have nothing to do with bringing in customers or sales. This includes having a good HR policy, onboarding the right digital payroll and accounting tools, and protecting your company with insurance and cybersecurity tools.

As we accelerate into a #newnormal, customers will also increasingly expect to pay cashlessly. Implementing digital payment solutions to ensure your customers can pay easily and conveniently will be important for them to return and to improve your cash flow, ultimately, impacting your business survival.

Providing The Right Payment Solutions For Customers To Pay You

Many entrepreneurs may neglect to provide the right payment solutions to their customers, and in particular, understanding the most convenient and cost-effective way to be paid. Beyond physical cash, businesses have to process digital payments or risk being shunned by customers who expect contactless payment options.

Not all digital payment solutions are built the same – with some taking a few days to clear, involving more paperwork and charging a high service fee, while others are cleared instantly and have lower fees, improving your business cash flow.

Choosing which types of payment solutions to offer your customers is also dependent on the business you are running. You also have to offer a balance of payment methods so you do not risk inconveniencing your customers.

For e-commerce companies, you need to give your customers diverse choices to pay via their preferred options, or they can simply head to another e-commerce site. Some common payment methods include credit cards (Visa, Mastercard and American Express), mobile wallets (GrabPay, Paylah, Alipay and WeChat Pay), PayNow, eNETs, PayPal, and cash on delivery.

For businesses that operate out of brick-and-mortar stores, there are even more considerations on top of this, including your counter space and electricity supply, equipment rentals and paperwork involved. You also need to ensure that your employees are trained to process all payment options.

Besides offering standard payment options, PayNow is another increasingly popular payment method. You can collect via PayNow through payment solutions such as OCBC OneCollect.

Fees And Charges For Various Payment Methods

Before you can start charging customers, you need to have your payment solutions ready. This is especially relevant for brick-and-mortar businesses, not just because of added considerations listed above, but also deciding whether to offer multiple payment solutions, and accounting for lead time to set up.

Obviously, there will be trade-offs when opting for payment solutions. Some payment solutions will cost more and require more effort on your part to set-up, while others offer simpler and lower cost methods to onboard.

In general, there are three main types of payment solutions to consider: Point-of-Sales (POS) terminals (processing NETS and credit card payments), mobile wallets and PayNow (via a payment solutions provider).

POS Terminals

If you want to accept NETS payment, you have to put down a security deposit of $200 for the device. For installation and activation of your NETS Terminal, there will be a transport cost of $50 and a service charge per terminal of $10. There may also be a one-time telco charge of $30 per terminal.

Thereafter, you have to pay an ongoing NETS Terminal rental fee of at least $38 + transaction fees of 0.8% per month. You can also decide to add credit card acceptance on the terminal for a further $12 per month + transaction fees of 2.99% to 3.5%. There are also other transaction fees to consider on other payment methods.

Source: NETS

Mobile Wallets

To onboard mobile wallets, you will likely have to work with them individually, while taking note of similar charges.

For example, GrabPay states there is no joining fees, but you will be charged a Merchants Discount Rate (MDR) for every GrabPay transaction made in-store. While they do not reveal the fees, various online sources that we have seen indicate that the MDR can go up to 1.0% of the transactions.

Source: Grab

PayNow

To offer PayNow, you also need a payment solution provider to process the transaction. This is regardless of whether you are operating a retail, e-commerce or other businesses. The key benefit is that funds are instantly credited into your business account.

For businesses that come into contact with your customers physically, OCBC OneCollect enables you to collect payments through PayNow QR as well as SGQR. This includes businesses such as retail, F&B, clinics, gyms, tuition centres, convenience stores, as well as on-the-go businesses such as handyman, home tutors and roadshow booths.

There is no setup fees or service fees for this. Transaction fees, which will be waived until 31 December 2020, is typically 0.25%.

Payment Solutions Set Up Fees Subscription Charges Transaction Fees Settlement
NETS Appox. $290 ($200 security deposit is refundable) $38/month 0.80% Next working day
Credit Cards (via NETS Terminal) Approx. $290 ($200 security deposit is refundable) $38/ month 2.99% or 3.5% Next working day
Mobile wallets (e.g. Grab Pay) Nil Nil 1% 48 Hours
PayNow QR (via OCBC OneCollect) Nil Nil 0.25%
(of total funds collected through QR)
Instantly

* Costs for accepting payments via credit cards, mobile wallets and  PayNow QR are based on the respective examples. Other credit card payment solutions, mobile wallets and PayNow QR payment solutions may charge a different rate.

How To Implement OCBC OneCollect For Your Business?

OCBC OneCollect is available to all OCBC Business Account customers. You just need to be registered with PayNow.

All you need to set up OCBC OneCollect is 5 simple steps. Or you can refer to this handy Quick Start Guide.

Step 1: Register For OCBC OneCollect

Via your Business Mobile Banking app, login and go to Settings>Manage OneCollect. Or via your Business Internet Banking (Velocity@ocbc), login and go to Tools>Manage OneCollect.

Step 2: Download the OneCollect app (from Play Store or Apple Store) and log in

Step 3: Set up Terminals (Add Outlets or locations)

Step 4: Set-up your users (add staff who can accept payments)

Step 5: Generate QR Code (to start collecting payments)

Having A Preferred Collection Method Can Improve Your Business Cash Flow

There will be differences in the process and cost of collecting via different payment solutions. As a business owner, you have to prioritise convenience for your customers so they come back.

However, this shouldn’t stop you from having a preferred payment mode – which should be the most convenient, in terms of setting up and receiving payment and maximises profitability with lower costs.

If you are running a business that is consumer-facing, then OCBC OneCollect can be a preferred collection method with the assurance of real-time collection directly into your business account, rather than have to do paper-based reconciliation and wait several days to receive your funds.

OCBC OneCollect charges a competitive transaction fee of 0.25%, which is currently waived till 31 December 2020.

Moreover, OCBC OneCollect is simply-designed as a mobile app, enabling you to add new users and terminals on-demand as you scale up or require flexibility, rather than book appointments to receive a separate terminal and pay a monthly rental for the terminal. Your terminal is a mobile phone.