Rapid growth in digital payments across APAC is transforming how customers and businesses access goods and services. Customers are eager for new technologies that enable modern, fast, and inexpensive payments. The stage appears to be set for programmable money to take hold as an efficient, effective and fast transaction method. But the question remains: how do we get there?
Amazon’s approach to payments innovation
Amazon focuses on delivering value to our wide range of customers, including consumers, small businesses, larger enterprises, and developers. We bring this customer-obsessed mindset to our payments business too. Our approach is built upon three core pillars:
- Security and trust: Offering products and implementing systems with strong data security, privacy and fraud mitigation.
- Customer experience and innovation: Creating intuitive user experiences and locally relevant products that meet a diverse set of customer needs worldwide.
- Access and affordability: Increasing payment choice, advancing financial inclusion, and helping businesses grow more efficiently.
The case for programmable money
Establishing a robust programmable transaction system can create significant efficiency gains for merchants and digital services companies. Programmability can facilitate both increased automation and increased innovation. Already it automates manual processes, speeds up fund settlement, and eliminates reconciliations. Over time, it could result in lower costs to serve and lower prices for merchants, sellers and customers.
As a retailer, we believe we can deliver value by being a part of the design process and encouraging features that promote adoption as well as an overall customer experience that builds trust and confidence in the programmable money system.
Project Orchid: everything you need to know
The public and private sectors play important roles in enabling financial access and inclusion, and collaboration between the two is integral to progress.
Project Orchid, which examines the various design and technical aspects pertinent to digital Singapore Dollar, is an example of such a partnership between public and private sectors. Amazon has worked in close collaboration with the Monetary Authority of Singapore (MAS) to explore potential use cases for a programmable digital Singapore Dollar and the infrastructure required.
As part of a Project Orchid industry pilot, Amazon will validate the open-source protocol WalletConnect for supporting online retail. We will test this Web3 protocol to connect to any compatible Web3 wallet, including Trust, Metamask and Coinbase, plus others, to “pull” funds from it, supporting a seamless online customer experience like card-on-file checkout. For retailers like us, this means the ability to facilitate transactions between Amazon stores and our customers in a single transaction. Even though customers may not see the efficiency gains as most of the work happens on the backend, in the end it allows merchants to lower costs and reduce settlement timeframes. This will in turn offer a better payments experience.
Our work with MAS will help us better understand the design principles and technical architecture underpinning the use of programmable Singapore Dollar. It will be a means to validate relevant retail use cases first-hand, helping to inform further development of a potential future system.
The future of programmability
As the payments landscape continues to evolve and governments contemplate different design models for new retail payment systems based on their national objectives, public-private partnerships like Project Orchid are crucial to enable innovation and promote trust. This serves as a good starting point but partnership efforts must go beyond experimentation on pilots and move towards real-world implementation supported by initiatives that build customer awareness and confidence. We’re optimistic that with the implementation of a merchant-friendly infrastructure, customers could widely use a future Central Bank Digital Currency for purchases that allow payments to register once defined conditions are met (e.g. payment on delivery).
Looking beyond our participation at the Singapore FinTech Festival and the next evolution of Project Orchid, it is worth reflecting on what we are trying to achieve. We aim to deliver a real-world application for purpose bound money, developed and executed from the merchant’s perspective—the principle upon which future innovations must be built. The foundations we are laying for programmability today will drive tomorrow’s payment innovations.