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Singtel widens its e-payments network but how will investors gain?

Trinity Chua

SINGAPORE (Mar 19): Singapore Telecommunications is expanding its cross-border mobile payment alliance. But how significant will Singtel's foray into e-payments be for investors?

To be sure, the details remain scant.

Singtel has refused to reveal if it has a revenue-sharing agreement with its regional e-payments partners. It has also declined to reveal if it charges a merchant fee.

But Arthur Lang, CEO of Singtel's International Group, says the partnership would result in greater business opportunities, ranging from gaming to social commerce.

Indeed, all the signs are pointing towards the telco hoping to play a bigger role in the regional digital payments and services space.

"If you look at payment as a domestic game, it is very difficult. [It] doesn't move the needle from a profitability standpoint because it is such a fragmented market. There are 27 players in Singapore, for instance," says Lang.

"We are targeting the tourist and unbanked market in the region where we hope to offer [more competitive] merchant and FX rates through [scale that we gain through more partnerships]," he adds.

The latest to join Singtel's VIA is Tokyo-based NETSTARS, a mobile payment technology company, adding its 100,000 stores to the network’s current 1.6 million merchant partners.

See: Singtel's cross-border payment alliance VIA expands to Japan

The alliance currently includes Singtel Dash and its Thai associate's AIS GLOBAL Pay. Kasikornbank’s K Plus and Boost Malaysia will join soon, according to the telco. It also plans to add LinkAja, the new consolidated e-payment services in Indonesia with more than 300,000 merchants, to VIA.

So far, Singtel has chosen partners in the region that have leading market shares in their respective countries. The telco has made the same bet with its slate of associates in the region. Among its VIA partners, K Plus has the largest network of users in Thailand, Boost Malaysia that has 3.8 million users is the largest in the country and NETSTAR is the biggest mobile payment aggregator in Japan.

Users can use their respective wallets to make payments in their local currency at NETSTARS’ merchants, from airports to a variety of tourist destinations and shopping malls.

NETSTARS targets to grow its merchant base to one million stores throughout Japan by end-2020.

“These partnerships to grow cross-border mobile payments continue to add further momentum to the Singtel Group’s goal of empowering consumers and enabling them to transact seamlessly across borders,” Lang says.

But whether these moves will benefit Singtel’s investors will remain to be seen – at least for now.