CEPAS Case

To: Richard Peterson

From: Anna Szperlak

July 21, 2014

   Singapore's e-payments landscape has been dominated by two major card issuers with non-interoperable cards; The Land Transport Authority (LTA) and the Network for Electronic Transfers Singapore (NETS). While both companies were working independently, the Land Transport Authority has dominated the public transit market in areas such as: rail, mass transit, bus, taxi, etc. and NETS controlled the retail payments sector as well as Singapore’s private car park payment schemes. Even though they were both strong, independent entities, the Infocomm Development Authority has decided to merge both companies and turn them into a stronger and more effective one. Using two cards for different purposes has created an inconvenience for the consumers, card issuers, as well as the society as a whole. This resulted in a higher cost for both, the consumer and the issuer. In order to overcome this problem, enhance the local micropayments and open up e-payment services for the consumers, The Infocomm Development Authority has launched an initiative to develop an innovative standard which would provide an interoperable platform. Contactless e-Purse Application Standard in short CEPAS, the next generation e-Payment initiatives, was introduced to the society incorporating an unique security and high-performance features, that enabled multiple payment applications which are offered by different issuers into a single smart card and it could be used to pay to travel either on the bus, taxi, rail transport, car park and road usage charges, as well as retail micro payments. 

   The concept of CEPAS was for Singaporeans to have a single multi-purpose store value card to use all throughout Singapore for any kind of payments. CEPAS was introduced as the long-term solution for the dual infrastructure landscape, decreased revenue collection and as the settlement system costs. Even though the network of cards and card readers was already established, the issuers knew that creating a single infrastructure environment would result in lowering their overall costs. The convenience of using single e-payment system for multiple purposes will benefit the consumer as well as the businesses. Also, there was a believe that the single infrastructure environment would increase consumers’ spendings, as studies have shown customers definitely tend to make larger purchases when using credit/debit cards rather than when using cash. In conclusion there are multiple different reasons and benefits with implementing the single e-cards.

Since CEPAS initiative was a tremendously large initiative, the planning involved several stages:

· Creating an effective plan to merge the two existing card issuers into one e-payment system

· Ensuring the investment and shareholders support

· Developing an IT system that would support this project

· Ensuring the security necessities required by the Singapore transit system

· Developing a process of distributing the new cards out to the public and easy switch for the consumer

· Expending the process of CEPAS users

   This large initiation is facing several risks and challenges. A fear that consumers might not accept this new project and society won’t be willing to switch their current cards exists. Furthermore, since it is very time consuming for all of the organization to allow CEPAS to integrate and replace current cards with their new credit, debit, or member cards, there was a risk that not all businesses would consider adopting CEPAS.