12 Sep 2018
Singapore has made a smooth transition to electronic payments and there has been a sharp drop in cash withdrawals at ATMs, however, the jurisdiction does not intend to scrap cash, according to Singaporean Deputy Prime Minister Tharman Shanmugaratnam.
Electronic payments are growing ‘in ease’ with more than 8 in 10 Singaporeans using some form of e-payments, and cash withdrawals at ATMs are coming down by S$300 million every year, however, cash still has a role in Singapore.
“We do not aim to be a completely cashless society. Cash has been with us for centuries, and will be around for quite some time more,” said Shanmugaratnam, who is also the Minister for the Monetary Authority of Singapore.
Some countries appear to be heading towards a cashless society, such as in Sweden, where ‘barely 1% of the value of all payments made used coins or notes.’
Shanmugaratnam made the remarks in response to a question by Sylvia Lim, MP, Aljunied GRC, on whether
the Government had “thoroughly assessed the possible adverse economic and psychological impact that the move to a cashless society will have on particular segments of society.”
Although the state will stick with cash, it does come at a cost. “It has been estimated that the cost of processing cash is about S$2 billion a year, or 0.5% of GDP in 2015. This is the amount that businesses collectively, especially small businesses, can potentially save,” he said.
Regarding the impact of e-payments on sectors of society, Shanmugaratnam mentioned that the elderly are adapting to this platform, such as in cases where banks have issued contactless cards, this is the ‘most convenient and intuitive e-payment’ mode for them as they are already familiar with using their contactless concession cards for public transport.
E-payments are also useful for the elderly as it means not having to carry cash for all their needs, and does away with many trips to the ATM, he added.
“However, the benefits and convenience of e-payments are not fully felt yet. This is mainly because the solutions building on this infrastructure are just beginning to proliferate,” Shanmugaratnam explained.
“The supporting infrastructure for e-payments has now been developed. E-payments will for sure be more convenient over time, as the solutions to support it become more user-friendly, people gain familiarity with them, and they become pervasive.”
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