In a move towards a cashless nation, two more banks, OCBC Bank and UOB have joined the Nets to allow payment through a mobile wallet application.
This allows users to make payment using their mobile phones instead of ATM cards. OCBC Bank and UOB join DBS and POSB to allow over 11 million Nets cardholders to make e-payment through the NetsPay mobile application.
According to a statement from Nets, the app will allow users to store up to 10 ATM cards digitally, and make payments with a tap on their mobile phones or by scanning a QR code.
A nation-wide shift
In his National Day Rally last year, PM Lee talked about the move toward becoming a Smart Nation, which meant becoming more technologically-savvy.
He said, that Singapore was not moving as fast as it ought to on digital transformation front, to which e-payment is a crucial component.
Even our local universities, such as the National University of Singapore (NUS), have motioned to go completely cashless.
However, there seem to be many obstacles in achieving such a lofty goal as a nation.
The first, the dynamics of our nation. According to a projection by the United Nations, the elderly – those aged 60 and above – will make up about half of Singapore’s population by 2050. These people would find it a lot harder than a younger population to make the switch, learn a new technology and to stop using cash. With their mind-sets deep-rooted in old habits, convincing the elderly population to switch to cashless methods would be a momentous undertaking in itself. Furthermore, for initiatives such as the Nets’ mobile app, it is unlikely that many older people own, or even know how to operate a smart phone.
Second, getting over the administrative fee. Merchants and sellers currently pay a 3 per cent transaction fee for MasterCard and Visa payments. They also pay a 1 per cent transaction fee for Nets payments. Furthermore, at some retail chain stores such as Courts Singapore, the cost of accepting cashless payments is about three times higher than accepting cash. What incentive do merchants then have to bear these costs? For example, if a cashless system were implemented in a hawker centre, why would hawker-stall owners urge their customers to pay using cashless methods? Would it not be easier (and less costly) for them to all simply put an ‘Out of Order’ sign on these machines and accept cash?
Lastly comes the issue of standardisation. Some merchants accept one option and not another. Would consumers then have to carry around an array of cards, one for each purchase?
Along with all of these possible issues that could arise, going cashless would mean that cyber security would have to upped and resources devoted to ensuring that frauds, scams and everything in-between be prevented.
With all of this, the question is, how is Singapore really going to go completely cashless?
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