The next destination on our journey around the world is Singapore! Glenbrook’s Chris Uriarte and Bethany May come on the show to share their stories using local and regional payment methods. Listen in to hear their experiences using GrabPay, QR codes, and even digital currency to pay a friend back for dinner.
While at the Singapore FinTech Festival, Bethany also had the opportunity to participate in a Central Bank Digital Currency pilot put on by the Monetary Authority of Singapore. She provides her insights on the “purpose bound money” trial and overall observations on the research and experimentation being done on CBDCs in Singapore.
Yvette Bohanan:
Welcome to Payments On Fire, a podcast from Glenbrook Partners about the payments industry, how it works, and trends in its evolution. I’m Yvette Bohanan, a partner at Glenbrook and host of Payments on Fire. We are ringing in 2023 with a Fanning the Flames travelogue series to talk with our team members who have racked up lots of miles traveling around the world in 2022, and to hear firsthand their experiences and observations with local payment networks across the globe. So with me today for this podcast are Bethany May and Chris Uriarte.
Bethany, Chris, welcome to Payments on Fire.
Chris Uriarte:
Hello, Yvette. Good to be back. Thanks for having us.
Bethany May:
Yes, thank you. It’s good to be here.
Yvette Bohanan:
And what country is on the docket today, folks?
Bethany May:
Singapore, yes
Yvette Bohanan:
Singapore. So Bethany, I happen to know that you lived in Singapore for a while. You studied there for your MBAs.
Bethany May:
That’s right, I lived there mostly during the pandemic, during Covid. I studied at the National University of Singapore and did a double master’s MBA and Master of Public Policy.
Yvette Bohanan:
And when did you leave Singapore? What year was that?
Bethany May:
About September of 2021.
Yvette Bohanan:
Right in the middle of all the fun. And then, so having lived there, going back, notice anything different? What changed? What stood out to you?
Bethany May:
What stood out to me? Well, it certainly was great to go back to Singapore after having been gone for a little while. From a non-payments perspective, it was exciting to see the city back to life and a lot of commotion again. It was great to see Singapore thriving in that way. I was quite familiar with the payment system there when I was living, and ultimately not too much changes as I went back. I was used to my GrabPay there and went back and sure enough felt right back into my habit of paying for everything with my GrabPay. So a great experience.
Yvette Bohanan:
Did you use the same account as when you were there before or did you have to get a new one?
Bethany May:
I think I had to get a new one because I had a new sim card, a new cell phone.
Yvette Bohanan:
So Chris, when were you last in Singapore? I’m guessing it was a little while ago.
Chris Uriarte:
Yeah, so it was pre pandemic. I was last in Singapore, I believe in early 2018. But I’ve done a lot of work in Singapore over the years and I tried to go back and take a look at… I’m one of these people that keeps track of all my flights over the years, and this was the 15th time that I’ve done the trip from New York to Singapore, so about seven or eight round trips. And that’s the longest fight in the world from New York to Singapore. You’re on that plane for 19 hours. So the journey of getting there is an experience in and of itself, but it was great to be back. It was great to experience the culture, and agree with Bethany. A lot of buzz going on in the city, the city is certainly very busy and very alive again.
Yvette Bohanan:
And you all there were supporting a client. But you also, I think Bethany, you had the opportunity to go to a conference for a day, drop in on-
Bethany May:
That’s right, that’s right. I went to Singapore FinTech Festival, which was as alive as ever. I think they had their largest number of attendees this year, over 60,000 maybe more. It was really incredible energy at the conference and super exciting time.
Yvette Bohanan:
60,000.
Bethany May:
I think so.
Yvette Bohanan:
That’s good attendance.
Bethany May:
I would say so. That’s right.
Yvette Bohanan:
So tell me a little bit, so you mentioned GrabPay. Between actually going out and about and interacting and buying things and that, were you both always using GrabPay? Or were you using cards? Were you using international credit cards? How were you navigating things in society?
Chris Uriarte:
Yeah, I think I’ll jump in first, Yvette and say that Singapore is always a great mix of east and west culture, not just from a cultural perspective, meaning the people and the cultures there, but the payments perspective as well. And what I mean by that is that cards are widely, widely accepted throughout Singapore. So you can certainly just survive on your card in most cases.
There are a number of exceptions though. Certainly when you go into some of the food centers, it’s where wallets are utilized quite heavily. But grab the Grab Wallet, as Bethany was talking about, is certainly something that takes the lead for all types of commerce around the country. So to me, just being able to use Grab was something that was exciting for me because I haven’t had the experience like Bethany had over the years. So I like the opportunity to obviously use these types of local payment methods, but you certainly, typically, have the card to fall back to as well.
Bethany May:
Can I add to that? I had, just similar with Chris, I had the opportunity to use Card and Grab for some of my payments, but I think one of the most challenging payments I had to make when I was in Singapore was a friend of mine who I went to dinner with, a group of my MBA classmates and I needed to pay back my friend digitally. I didn’t have any cash, but I could not make a P2P transfer with my GrabPay Wallet. They would not allow that because my card was American. So I had to figure out how I can pay my friend back digitally without cash. And I ultimately ended up using digital currencies for that payment. I transferred money via my Coinbase. So that was a fun way to think outside the box of how can I get value to my friend, digitally.
Yvette Bohanan:
So what was the digital currency, do you mind saying what?
Bethany May:
I don’t mind, I used USDC.
Yvette Bohanan:
Okay. So you were in Circle USDC and that experience… Walk us through the steps you had to take to do that. That’s pretty interesting.
Bethany May:
Well, ironically, I had already opened my Coinbase account months ago to just experiment and test out these technologies. And I had put in a nominal amount of 10 or $20, but I needed to send my friend, I think a $100. So I had to first, move more money from my bank to my Coinbase account, my Coinbase wallet. I was surprised to find that I would need to wait six days before I could send that money to my friend. I assumed it would be instant or that I might need to wait a day for an ACH payment to move. But actually I think there was more going on than that, so I had to wait six whole days before I could send that money.
Yvette Bohanan:
Did they tell you up upfront it’s going to be six days?
Bethany May:
Yes, they did. So I waited my six days and then sent the money to my friend’s wallet using his wallet address that he gave to me. I think there was a few weeks where we were not communicating very well, in which there was uncertainty if he actually got the money. In the end, he confirmed he did receive the money, it was there. I sent him some sort of transaction log and he said that yes, he received it. So maybe he’s actively trading on his, and I don’t know why he wouldn’t find out if he had $100 come into his wallet, but in the end it worked and I was happy to finally have paid him back, I think at this point for two meals because I was already in the debt to him for another meal. So it was good to get that debt off on my account.
Yvette Bohanan:
And then your friend’s wallet was a digital currency wallet?
Bethany May:
That’s correct. I’m not sure what wallet he’s using, but he’s very deep into Blockchain, working at a Blockchain VC. So he knows a lot of what’s going on.
Yvette Bohanan:
So he’s busy.
Bethany May:
He’s fluent, yes.
Yvette Bohanan:
Chris, can you top that? That’s an interesting experience.
Chris Uriarte:
No, no, it’s great. And I think the other thing that Bethany points out when he asked her about what wallet he’s using, she doesn’t know because she doesn’t have to know and-
Yvette Bohanan:
She doesn’t care, yeah. Hello.
Chris Uriarte:
That’s a great thing about using some of these digital currencies is you bring whatever wallet to the table you want to, and as the case and her friend, and eventually she got the confirmation that he received the money, but there’s a million and a half ways now that her friends could have accessed those funds.
Yvette Bohanan:
And you really don’t care what currency, where the currency… What he did? Did he take USDC? Did he convert it right away? That’s all his business. It’s just you got the money out to him and that was what mattered. That’s interesting that you were able to do it at all.
Do you have any sense, Bethany, if you made or lost money on that transaction? How much did it cost you versus conversion rates? Did you actually bother to… Or were you just so relieved that you were able to?
Bethany May:
I was pretty relieved, to be honest. Because I was using USDC, I didn’t worry too much about the conversion rate. I will say I paid some sort of amounts to load my wallet in general, even though I think I was moving it from my bank account. So there was some fees associated with getting money into my wallet for sure. But given that I was just trying to send my friend some money, get rid of that debt that I’ve been owing him for a while, I was happy to pay that in the short run.
Yvette Bohanan:
So digital economy, but a blend of east and west, north and south, whatever we’ve got. We’ve got Coinbase, we’ve got GrabPay, we’ve got international cards. Did you touch physical cash at all on this trip? Did you touch Singapore dollars or need Singapore dollars at all? Did you go to an atm? Did you feel like you needed backup reserve currency in physical form for anything or…
Bethany May:
No, I never used cash in Singapore on this trip. And to be honest, I think that the monetary authority of Singapore has made significant strides to try and remove cash from the economy by offering their robust system of mobile wallets and an interoperable payment system. So I don’t think there’s hardly any reason for cash in Singapore.
Yvette Bohanan:
So all of that is going to feel really pedestrian as we get into the next question here, which is you had the opportunity to actually participate in another form of digital currency and transact, which is Central Bank digital currency, and there was a pilot going on when you were there.
What was that like? What was it like to use Singapore dollars in digital form, CBDC format, particularly as someone who doesn’t actually live in Singapore? I’m fascinated that you even got into this pilot. How did you get to do this?
I’m going to want to know, I’m going to Singapore next month. I want to be in the pilot. What do I have to do?
Bethany May:
Call me a payments nerd. But it was a really exciting moment for me to be engaging with what could be the future of digital cash. The experiment was a limited experiment at Singapore FinTech Festival.
The monetary authority of Singapore, which has been researching and developing these technologies to offer digital programmable money, decided to publicly trial it at Singapore FinTech Festival and you could go to a few select kiosks and someone there would help you to download the appropriate wallet. I downloaded a Sequence Wallet, opened a Sequence Wallet, and then after I opened that wallet, they made a P2P transfer to send me basically a voucher into my wallet, which I could use at specific designated merchants to get something nominal, like food or a beverage or a little bit of a token, like a key chain or something, only at Singapore FinTech Festival.
Yvette Bohanan:
So they’re able to ring-fence usage of the currency and the wallet. That’s interesting. And they immediately gave you an incentive payment because it’s a pilot, so they need you to try to use it and they don’t expect you to use your own money. How did it go? Was it a QR code kind of transaction? Were you scanning at particular kiosks? How did you actually initiate the payment?
Bethany May:
It was a QR code initiated payment, so I quickly found another kiosk or booth where I could use my… What they’re calling purpose bound money, my voucher. And of course the offering was a key chain. I didn’t really need or want a key chain, but I thought, let’s do this. I’d love to try this out. Scanned the QR code and the person at the kiosk helped me to send over the correct… At that point, I think I had three different vouchers. She helped me to pick the right one that I would want to send to her as the right value for this key chain. One additional thing I should mention is that the vouchers also came with an expiration date. So not just ring-fencing what you can use that money on, but the timeframe within which you can use it before it expires. And now when I go back into my Sequence Wallet, I can see those vouchers there, but they do show as being expired and so no longer able to be used for anything.
Yvette Bohanan:
And this was a completely separate wallet, it wasn’t like you could load CBDC to GrabPay right now. Is it a separate-
Bethany May:
The one that I used was separate. I don’t have any, I know they’re working with Grab on this, so it’s possible that one could have loaded money into their Grab Wallet. The monetary authority of Singapore is working on this purpose bound money trial. They worked with Grab and a few different other companies in that trial.
Yvette Bohanan:
Okay, okay. I like the phrase purpose bound money. That’s kind of interesting.
Bethany May:
I like it as well, Yvette. I think it’s highlighting… It’s different from a digital cash in which can be used anywhere. They’re saying, Hey, this money that we’re thinking about creating is going to be, it’s different than cash. It’s not just anywhere you want in the economy. We are having clear goals with this digital version of value that we’re creating. And they’ve identified at the moment what they think those purposes or use cases might be.
Yvette Bohanan:
What are they talking about then?
Bethany May:
Some of the things they’re talking about are using it for government disbursements, so the government payouts, they could be using it for vouchers or learning accounts. So the monetary authority of Singapore is sort of defining how they think that these vouchers could be most useful for the features that they provide.
Yvette Bohanan:
So that’s really interesting because a lot of times when we talk about central banks, we say is a stakeholder in a payment system? What do they care about? And safety and soundness and to protect the economic health and the GDP of a country, it’s really important with systemic systems. We also talk about protecting consumers and having a bias towards protecting consumers in a lot of countries. But we always talk about that third possibility, that third pillar of having broader economic objectives or broader objectives where the payment systems themselves support things that the government is trying to do for the country.
And here we see the monetary authority of Singapore with this position that I don’t think I’ve seen quite as clearly articulated in other countries for what’s the purpose of a retail CBDC and how they’re already trying to flush physical currency out of the day-to-day life, getting very digital, but you don’t necessarily need a digital currency for that. But to meet these other objectives, they’re using it as truly programmable money and testing it that way, in a very specific way. That’s unique. I don’t think I’ve really heard about something quite as thoughtful as that yet.
Bethany May:
I think thoughtful in my opinion, is absolutely the correct word. I think when people talk about central bank digital currencies, there’s a lot of concern that the government might put in expiration dates or negative interest rates or no interest rates. There’s a lot of concern about how these technologies might be used if that were to be the predominant form of currency in an economy and what sort of powers that might give a central bank or the government. And I think here, the monetary authority of Singapore, with their use of the word purpose-bound money is clearly indicating that they’re going to be using it for very specific purposes, like learning accounts. A very defined use case in which point, having an expiration date might be a very relevant idea. And so I think they’re being very thoughtful about how they sort of term what they’re calling it and how they’re using it. And that is something that I think people can understand and get behind.
Yvette Bohanan:
Yeah, absolutely. Absolutely. So my guess is given your backgrounds and your interest in this whole space and going to Singapore and having been there a lot in the past, you’ll be there again in the future. So before we wrap up, I’m curious, what are a couple things you’re going to be watching as we go into 2023? And my wild card question, imagine you are visiting Singapore five years from now. How do you think you’ll be paying for things? What do you think will have changed? It’s one of the most progressive thought leaders out there right now, is the monetary authority of Singapore when it comes to payments.
Chris Uriarte:
It’s a tough question because you see Singapore and the MAS-driven initiatives as being so innovative and so forward thinking. So really, I would say anything’s on the table from a Singapore perspective. What’s really interesting, you guys used the term thoughtful earlier, and I think that’s how I would describe the regulatory environment and the regulator in Singapore, regulator themselves is I think their regulation is very thoughtful when you look at things that they’re doing around regulation with BNPL, for example. They’re a thought leader in this area, regulation around how fintechs should fit into the banking system and putting together roadmaps and frameworks for that. Thoughtfulness around interoperability between different wallets in different countries because they know that they’ve got… Singapore’s a very, very, very small place. So they’ve got people that are moving across borders quite frequently. So there is a lot going on in this country in regard to the advancement payments altogether. And they have a very helpful and thoughtful regulator that that’s helping facilitate this.
Bethany May:
And I would just add to that. I think like Chris has mentioned, MAS is such a forward thinking entity. I’m just really excited to see the research that they’re doing and the experimentation that they’re doing on Central Bank digital currencies, both from a retail and a wholesale perspective.
And thinking about a wholesale perspective, MAS recently announced that they’re embarking on a collaboration with the New York Innovation Center on further experimenting with cross border central bank digital currencies, wholesale CBDCs to improve efficiency of cross-border payments. So I’ll be looking for, in the future, papers or these collaborations or learnings from these collaborations coming out of MAS, because I think it should give some really good insight into how countries are thinking about using these wholesale CBDCs to improve cross-border payment efficiencies. So I’m excited to see what they’re coming up with. It’s an interesting time for sure.
Yvette Bohanan:
Yeah, very, very much so. Well thank you both, Bethany. Chris, thanks so much for being on the podcast today and sharing some of the insights. I think you had a very exciting trip from a payments perspective. I hope it was great overall, and thanks for taking the time to share.
Chris Uriarte:
Thanks.
Bethany May:
Thank you.
Yvette Bohanan:
All right, and to all of our listeners, thank you for listening in. We appreciate you and your support of our podcast. And until next time, take care, stay safe, travel well, and do good work. Talk to you soon.
