Singapore is Going Cashless
The days of paying with cash are slowly fading into the sunset. Singapore, one of the important economic powerhouses in Asia, is moving to a cashless society. According to Ong Ye Kung, the Education minister of Singapore, who is also a board member of the Monetary Authority of Singapore, the Singaporean government is aiming to eliminate the usage of cheques and reduce the cash payments in the country – to make Singapore a cheque-free country by 2025.
How moving away from cash is brewing in Singapore
Growing by more than $10 billion a year, e-payment in Singapore has gained its traction as one of the secured payment methods. According to Ong, more than eight in 10 Singapore consumers have adopted e-payments while almost three in five Singapore merchants are accepting e-payments – a good omen of the realising the goal of making Singapore a cashless society.
Aiming to go even deeper into the realm of cashless payments, the Singaporean government has mapped out strategies to achieve the goal. The latest cashless strategy is instantaneous online payments without having to disclose banking details. The strategy is made possible when PayNow transfer service includes businesses.
Launched last year, PayNow allows users to perform online transactions via their mobile phones without disclosing their banking details. PayNow has garnered around 1.4 million registrations where the transaction volume recorded at nearly $900 million. PayNow is particularly useful for one-off payments (e.g. insurance claims and casual labour wages). The best thing since sliced bread is now remitters do not need to keep track of payee details because the data is kept at a central depository managed by a third party.
Featuring seven participating banks: Citibank, DBS, HSBC, Maybank, OCBC Bank, Standard Chartered Bank and UOB, PayNow Corporate has brought e-payment in Singapore to a new height. Following the success of Ministry of Education Edusave Awards’s disbursements via PayNow, other government agencies are exploring ways to perform disbursements via PayNow.
Singapore leads the race to become cheque-free and cashless
“Cash is no longer king” – perhaps this is currently the best sentence to describe the brewing cashless environment in Singapore. ATM withdrawals have declined by more than $300 million a year; fell by 40% if compared with previous year. The declined ATM withdrawal figures have provided an insight into the wider shift towards a cashless society and it shows that consumers are shying away from bricks-and-mortar bank branches.
Following the rising adoption of e-payments by Singaporeans in line with the Government’s cashless economy policy, the cheque transaction volume has hit a low figure by 28% last year; fell from 37% in 2015. The declined cheque transaction volume is another good sign that Singapore is on the right track to becoming a cheque-free country by 2025.
While electronic payments are getting popular due to the convenience and hassle-free user experience it affords the user, e-payment systems are prone to the risk of fraud. According to Ong, a new Payment Services Bill will be introduced later this year in relation to enhancing consumer protection against e-payment risks.