Reply to Parliamentary Question on Singapore's move towards a cashless society
QUESTION NO 986
NOTICE PAPER 1346 OF 2018
FOR WRITTEN ANSWER
Date: For Parliament Sitting on 10 September 2018
Name and Constituency of Member of Parliament
Ms Sylvia Lim, MP, Aljunied GRC
To ask the Prime Minister whether the Government has thoroughly assessed the possible adverse economic and psychological impact that the move to a cashless society will have on particular segments of society.
Answer by Mr Tharman Shanmugaratnam, Deputy Prime Minister and Minister in charge of MAS:
1 Ms Lim asked about the adverse impact of a move towards a cashless society. 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.
2 Electronic payments are growing in ease and convenience, and more Singaporeans are taking to e-payments every day. Today, more than 8 in 10 Singaporeans are using some form of e-payments. More than a million Singaporeans have signed on to PayNow. We want to help every segment in society to be able to use e-payments when it is convenient and beneficial to do so.
3 For consumers, e-payments are now a lot more convenient than cash. Payment is as simple as waving a card, a smart phone or scanning a QR code. More importantly, for the elderly, it means not having to carry cash for all their needs, and does away with many trips to the ATM. As it is, cash withdrawals at ATMs are coming down by S$300 million every year.
4 For small businesses, accepting e-payments helps to reduce the time and effort in counting cash, reconciling money, and depositing the money in the banks. For a hawker, it means no need to handle cash as he prepares food, which also improves hygiene. 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.
5 The supporting infrastructure for e-payments has now been developed. We have implemented FAST to facilitate real-time inter-bank account transfers. With PayNow, both individuals and companies can pay one another using their NRIC numbers or phone numbers or Unique Entity Number as the case may be. And Singapore is the first country to adopt a standardised QR Code for payments. Every merchant will just have one QR code for every e-payment scheme it decides to accept, and there will be no confusion on what QR code to scan.
6 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.
- The standardised SGQR is being rolled out progressively. And as more businesses sign up for PayNow Corporate, it will become easier for people to pay their bills or pay for goods and services or even hawker food by scanning a QR code using their mobile phone. The good thing about paying by QR code is that it does not need any payment accepting devices, and the entry barrier is very low.
- There is also the alternative of contactless payments. NETS and the major consumer banks are progressively replacing older NETS cards with newer NETS contactless bank cards in the coming months. A person just needs to wave his or her NETS contactless bank card to make a payment. This is actually the most convenient and intuitive e-payment mode for the elderly, who are already familiar with using their contactless concession cards for public transport.
7 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.
8 We are putting effort into educating the public to help everyone take advantage of e-payments. IMDA has launched the e-Payment Learning Journey to help seniors learn how to make digital transactions. SkillsFuture Singapore has rolled out a SkillsFuture for Digital Workplace programme to reach out to members of the public. Banks are also re-skilling branch customer service staff, to become digital banking ambassadors, to help customers enjoy the benefits of digital banking, including e-payments. In many constituencies, students are volunteering to help educate less digitally-savvy residents.
9 Through the collective effort of the Government, industry players and the community, we can make e-payments work for all by bringing about greater convenience and benefits.
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