SINGAPORE, Oct 28 — A long-awaited date with her national serviceman boyfriend for Nazrana Shaheen ended up being cut short, no thanks to a banking services disruption by DBS...
With the internet — which itself is not immune from disruptions — being one of the ways in which cashless systems can be affected, some financial experts have pointed to the efficacy of offline modes of payment or banking systems, such as mobile e-wallets. ― TODAY picSINGAPORE, Oct 28 — A long-awaited date with her national serviceman boyfriend for Nazrana Shaheen ended up being cut short, no thanks to a banking services disruption by DBS Bank and Citibank on October 14.
Also caught off guard was 42-year-old Nadya Salyriana Sallehin, a travel consultant, who did not have cash on-hand to pay for her family’s dinner at Tampines.Since the family’s initial plan to go on a day trip to Johor Baru was cancelled due to the Saturday jam, Nadya had only Malaysian ringgit with her, along with her usual contactless mode of payments.
“I only started going out cashless this year, but when this happened, it was a wake-up call,” said Nadya. After over 12 hours of the disruption, which DBS first confirmed in a Facebook post at 4.37pm, DBS Bank announced that services had been fully restored overnight. Citibank’s services were also restored overnight.
The D-SIBs are DBS Bank, OCBC, United Overseas Bank, Standard Chartered Bank, Citibank, The Hongkong and Shanghai Banking Corporation and Malayan Banking Berhad. However, they also caution that offline payment applications come with their own set of challenges for both businesses and consumers. “We had a beeline of customers whose DBS and Citibank-issued cards didn’t work. We restarted our devices, checked the connection, and nothing worked. Then we saw the notification from the news and realised there was an outage.”
Likewise, Nadya, who was unable to withdraw cash or use her credit cards, had no choice but to promise the restaurant that she would return to settle her dining bill once banking services were restored. She even showed the staff the TikTok clip she had filmed of ATMs bearing the message “this terminal is temporarily offline”.
Colin Chen, founder of cafe Hello Arigato, which has four outlets across Singapore that accept only cashless modes of payments, said that its business was largely unaffected as customers used cards from other banks or opted to pay via GrabPay, an e-wallet. “Our transaction data and payment numbers can be reconciled more accurately, which our accountants love. And with that we get more up-to-date data on finances and cash flow of the business,” he said.
For example, Tan ensures that the robots are on an enterprise grade bandwidth for their network connection, to ensure high availability to customers. Agreeing, Dr Gordon R. Clarke, managing director of payment services consulting company Monetics, said that record keeping automatically provided with digital transactions can help business save time both on issuing change and on cash reconciliation.While digital bank disruptions are not new, Fair Tech Institute’s Lim said that the October 14 outage was “unusual” as it impacted both the online and method-to-offline payments for some banks.
“How robust were the failover systems and what worked or did not work in this particular outage?” was one question to consider, said Lim.“The fact that banks might opt for the same top-tier data centre or other IT service provider amplifies the likelihood of a systemic outage, which leads to more severe consequences for both businesses and consumers,” said Associate Professor Cindy Deng Xin from the banking and finance department at Nanyang Business School.
The MAS said on October 19 that both DBS Bank and Citibank were unable to fully recover their systems within the required timeframe. Under MAS’ requirements, the unscheduled downtime for a critical system affecting a bank’s operations or service to customers must not exceed four hours within any 12-month period.
To ensure business continuity in the immediate period of a service disruption, fail-safe measures are needed, they added. Chen from Hello Arigato said that his staff had been trained to accept cash payment in case none of the e-payment alternatives work. For Rodney Sim, group commercial manager at gastrobar GudSht, e-payment is the “primary payment option” at his business, which accepts a range of e-payment methods including QR Code payment, all major credit cards, Nets and buy-now-pay-later options from Pace.
Chang added that this was the first time it had been affected by a banking services outage, and the store now plans to explore adding alternative methods of payment such as GrabPay and ShopBack. Dayan Koven, Accenture’s managing director of financial services in Singapore, added that it is important for consumers to “approach payments with intention”. This means staying informed about the pros and cons of going cashless, including cybersecurity concerns and guarding against scams.
The popularity of e-payments with merchants also comes from the functionalities it provides to businesses, including providing transaction data for analytics. This was echoed by Koven, who said that one key reason businesses prefer to remain cashless is shifting consumer expectations, which now tend towards “frictionless payment experiences” and “smooth and secure transactions”.
“Businesses benefit from increased brand trust, a competitive edge, and broader consumer reach,” he said. While China has two main vendors in WeChat and Alipay, Lim said that Singapore currently has no “leading” e-payment mechanism, with a more fragmented payment market consisting of many e-payment options.Prof Loh noted that merchants and consumers in China were given incentives to adopt e-payment, such as the vendors charging almost zero commission for merchants, which made participating in the digital payment landscape more attractive.
“Trying to pace our adoption of being fully cashless is not because we are afraid of technology but because we want to leave no one behind”. Dr Clarke said: “It is not realistic to eliminate cash entirely, but it will likely become less commonly used, as in the Nordic countries.”
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