It feels like there are a lot of people in Asia trying to make the cashless future a thing. Most of them are tech firms who would benefit from this in some form or another. Singapore is probably the one place that could actually pull off being a cashless society. However, the Monetary Authority of Singapore (MAS) does not see that happening.
“We are promoting e-payments because it is efficient, convenient and green. But we are not aiming to be a cashless society. Cash will continue to be a familiar and convenient way to transact,” MAS Board Member Ong Ye Kung revealed during a recent debate on ministries’ budgets.
While consumer habits in the city-state point to a lessening need for dollar bills, there had been some concern that some segments of the population would be left behind. Ong stressed that cash would continue to have a place in Singapore and the government would work to ensure there were enough ATM and cash withdrawal points for those who needed them.
Government data found that the ratio of ATM cash withdrawals to e-payments has steadily fallen from 47 percent in 2016 to 17 percent in 2020. The Singaporean government expects the trend to continue moving forward.
“This ratio should decline further as more people get used to accepting e-payments. There are Singaporeans who are less familiar or face difficulties with e-payment and we will not leave them behind,” Ong explained.
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Singapore embraces cashless movement thanks to PayNow
Singapore has been able to move towards a more cashless society thanks to the successful rollout of PayNow. The fund transfer service and e-wallet has proven to be a hit with users with 4.9 million people signed up for it, according to the MAS.
Additionally, PayNow Corporate registrations for businesses now sit at 240,000. Ong stated that 80 percent of residents and businesses are currently on PayNow.
In 2020, nearly SGD 5 billion (USD 3.7 billion) worth of transactions happened via PayNow with more growth expected. The service has been connected with non-bank e-wallets, including GrabPay and Singtel Dash, with this likely to fuel usage.
Interesting Analysis
Despite what every myopic fintech founder yells from the rooftops, cash isn’t going anywhere. It was refreshing to hear the MAS come out and say just it. Singapore has done a great job in embracing cashless ideals without losing sight of reality. There will always be times when it is easier or faster to pay with cash than digitally. That’s not a bad thing. If anything, more fintech firms should look at how they can co-exist and even augment the cash payment experience.
