In his annual National Rally Day speech Lee said that six out of ten transactions in Singapore still involve cash and cheques. In China, by comparison, cash has become almost obsolete in major cities, with consumers preferring to use mobile apps such as WeChat Pay and AliPay, he said.
"We have a natural advantage. We are compact and highly connected. Our people are digital-literate and our schools are teaching students basic computing and robotics. But, while we have the right ingredients, we lag behind other cities in other areas," Lee said.
E-payment services do exist in Singapore, but they are not interoperable, Lee said. Currently, consumers have to carry several cards if they want to make payments electronically and retailers have to install multiple readers.
The Monetary Authority of Singapore (MAS) had been working on this and encouraging payments and payment providers to unify their offering, Lee said.
During his speech Lee encouraged the use of PayNow, a peer-to-peer funds transfer service that allows users to pay and receive money based only on their mobile phone number. Run by Singapore's Association of Banks, it is available to customers of Citibank Singapore, DBS Bank/POSB, HSBC, Maybank, OCBC Bank, Standard Chartered Bank, and United Overseas Bank.
There are plans to make QR codes available for PayNow, and to make the payment method available at hawker centres, Lee said.
MAS recently set up a Payment Council as part of a series of initiatives on e-payments. These include the development of seamless payments solutions like PayNow, supporting the introduction and rollout of unified point-of-sale terminals at merchants, and introducing new legislation to protect consumers and help develop new payment solutions.