Saturday, 11 July 2020

DBS pushes digital transformation forward with launch of industry’s first purchasing card

DBS is pressing ahead with its efforts to support the digital transformation of Singapore’s logistics sector amid the COVID-19 situation, launching the DBS Logistics Purchasing Card (DBS P-Card), Singapore’s first cashless purchasing card for the logistics sector.

The DBS P-Card provides logistics small and medium-sized enterprises (SMEs) with a digital, near contact-free solution to settle payments and collections at container depots, removing the hassle of the current manual, cash-based process. It is estimated that each driver can save around 30 minutes each day on payment matters if the DBS P-Card is made available across all container depots in Singapore.

Beyond the benefit of convenience, the DBS P-Card reduces drivers’ and cashiers’ exposure to bacteria and viruses from handling cash, providing added health and safety assurance, especially during the ongoing COVID-19 situation.

The DBS P-Card is part of DBS’ Digital Logistics Solutions Package that was launched at Logistics Disrupt in October 2019 to help address pain points experienced in Singapore’s logistics and supply chain ecosystem.

DBS’ group head of SME banking Joyce Tee noted that operational inefficiencies from paper-based, manual payment and collection processes could hamper the growth ambitions of logistics SMEs once the COVID-19 situation stabilises.

“These manual and paper-based processes are longstanding pain points in Singapore’s logistics and supply chain sector, and DBS has been working closely with industry partners to find workable solutions. The current economic lull due to the COVID-19 situation presents an opportunity for us to test and implement some of these solutions so that our logistics SMEs, which form the bedrock of Singapore as a global logistics hub, are in a better position to capture the uptick in business activity when the crisis passes,” Tee stated.

Singapore has been ranked by the World Bank as Asia’s top logistics hub for 10 years in a row, and the logistics sector accounts for about 7% of Singapore’s gross domestic product. This places Singapore favourably to ride on the projected growth of e-commerce in the region in the coming years. SMEs in the logistics sector are looking to capture a slice of this growth by capitalising on the increasing need for transport and storage solutions.

Yang Kee Logistics has signed on as the first customer to adopt this solution. The DBS P-Card will enable drivers and hauliers to completely digitise payments and collections at Yang Kee’s two container depots in Tuas – Pacific Trans and Container Connections. On average, Yang Kee processes over 25,000 payments each month at its two container depots. These payments are currently done manually and out of pocket with the use of physical cash.

An estimated 1,000 drivers are expected to eventually benefit from using the DBS P-Card as DBS and Yang Kee engage haulage companies who use Yang Kee’s container depots.

Koh Yang Kee, executive chairman and founder of Yang Kee Logistics Pte Ltd, said, “As the largest locally owned logistics company in Singapore, Yang Kee is delighted to partner with DBS to introduce this much-needed innovation for Singapore’s logistics sector. The DBS P-Card streamlines the entire payment and collection process at our two container depots and benefits both our container depot staff and the drivers who use our container depots. The DBS P-Card is just one step in Yang Kee’s digital roadmap, and we look forward to working closely with DBS and our partners to further drive our digital transformation.”

“Our drivers can enjoy significant time-savings and convenience from using the DBS P-Card. With this solution, our drivers will be freed from the hassle of handling cash, which helps give additional peace of mind, especially with the concerns around COVID-19. We hope more container depots will accept the DBS P-Card in the coming months so that the entire logistics sector can share these benefits,” Ng Choon Eng, managing director of Rejoice Container Services, one of the haulage companies which has applied for the DBS P-Card, said.

Tee added, “We are pleased to be able to leverage our capabilities as the World’s Best Digital Bank to introduce a digital solution to address the payment and collection hassle faced by logistics companies. The positive feedback from Yang Kee and their haulage partners has been deeply encouraging and affirms the bank’s commitment to partnering logistics SMEs in their drive for digital transformation even throughout COVID-19. DBS will be looking to engage more companies to progressively extend this solution across the industry, and in the process, help with the transformation of Singapore’s logistics sector.”

Today’s payment and collection process – manual, fragmented and cumbersome

Today, drivers typically carry about $141 (SGD 200) to $352 (SGD 500) in petty cash on them to pay for a range of services at container depots, such as processing, handling, washing and repair charges, with drivers needing to queue at the cashier to pay for these services. Drivers with insufficient cash on them need to contact their office and either wait for additional cash or a cheque to be delivered, or for their office to transfer the shortfall to the container depot through bank transfer. These delays result in lost productivity and time which could have been better spent on higher value-added tasks.

On the container depot’s end, the manual and fragmented collection process can lead to problems reconciling cash collected at the register and the actual services rendered. All physical cash and cheques received have to be brought to and deposited at a bank branch.

DBS P-Card – simple, accurate and hassle-free payments

The DBS P-Card addresses these pain points by enabling drivers to make payments with a simple tap of a card on the checkout terminal, not unlike tapping a card to board a bus. Drivers will no longer need to carry thick wads of cash or wait aimlessly at the container depot for their companies to resolve cash shortfalls.

Container depots will not have to contend with reconciliation errors with collections done digitally and sums automatically credited into the container depot’s DBS corporate account the very next day. Container depots will also be able access holistic payment and collection data for the first time, allowing them to conduct more precise business analysis and forecasting. This also enhances security for the container depot while avoiding the need to pay for daily courier services to the bank.

Re-disseminated by The Asian Banker

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