Can Singapore catch up in the race to go cashless?

Singapore is one of the most advanced nations in the world, whether we talk about biomedical technology or financial services, trade or digital literacy. Singaporeans live a lifestyle that is increasingly digital and well connected. Yet, Singaporeans have not gone cashless. Most citizens still prefer the good old cash for most of their payments. Cash and debit or credit cards are the default options at a time when there are digital wallets or mobile apps to make the same payments. Prime Minister Lee Hsien Loong spoke of a smart nation in his National Day Rally speech. Singapore cannot become a smart nation unless technology is woven into every sphere of life and remains connected. One prerequisite for this is to become a cashless society.

Singapore is Lagging Behind

New York, Hong Kong and Dubai have made giant strides towards becoming cashless cities. China has made phenomenal progress. You could go to a street vendor in any Chinese city, buy food and pay using your digital wallet. You can even pay a tip to a waiter directly using the same digital wallet. India, with its much lower internet penetration given its population, has made serious attempts at going cashless. Indian Prime Minister Narendra Modi demonetized high currency notes in November 2016 and urged the citizens to go cashless, to use digital payment services such as mobile apps or wallets. Compared to all these developments, Singapore has made no significant move towards a cashless system.

Delay in Transformation

Singapore has been lagging behind because there wasn’t any incentive to go cashless. Most cashless transactions cost more than using cash. One can obtain cash from ATMs located all around the city. Singapore is a financial hub. It serves as regional headquarters for many global banks and as global headquarters for some other banks and financial institutions. Most Singaporeans are likely to find an ATM within five hundred metres of their home, office or wherever they are. Carrying cash and debit or credit card is the most practical option. Most street vendors and even upscale establishments are averse to going cashless. The transaction fees on cashless payments, be it the convenience fee or the commission being charged by banks and other intermediaries, make digital transactions a loss incurring proposition. These fundamentals need to change if Singapore has to truly become a cashless society.

India had black money or untaxed income and counterfeit currency notes to worry about, which is primarily why going cashless made sense for the government and the people largely embraced the idea. China had the same counterfeit currency problem and people don’t like carrying a lot of cash for the fear of getting robbed. Going cashless is rational. Similar circumstances did not and do not exist in Singapore. Hence, there is no strong compelling reason for Singaporeans to go cashless. However, that can change when people realise the ease of doing business, the simplicity of the entire process of making payments and how many complicated process, from parking coupons to transferring money to a friend, can be made utterly convenient and instantaneous.

Given Singapore’s digital literacy, high internet penetration, use of smart phones and the willingness to adopt anything new that will enhance the lives of everyone, the people can certainly catch up in the race and indeed go cashless.

About the Author
Morris Edwards is a content writer at CompanyRegistrationinSingapore.com.sg, he writes different topics like Will the Future of Singapore Be Cash-free? and all topics related to Fintech and Business in Singapore

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