COMMENT: Is Singapore ready for the cashless payment revolution?

By Andrew Tan

Cashless payments have been at the forefront of news since Prime Minister Lee Hsien Loong brought up the issue at the National Day Rally in August.

Lee is pushing for cashless payments to be adopted nationwide as part of the Smart Nation programme. Razer CEO Tan Min Liang was so enthusiastic about the project that he tweeted to Lee to say he can propose an e-payment system that can be rolled out across Singapore within 18 months.

Whichever is the vendor chosen to implement such a system, it would have a massive impact on Singapore as cashless payments are expected to have a multiplier effect on the economy. But what are the investments needed to enable seamless transactions across the sectors? What are the main considerations for sectors and workers who are behind the curve?

From the setting up of systems ranging from the point-of-sales, reporting to accounting, new services would be created to facilitate cashless payments.

One of the sectors to benefit the most from the new industry is information technology, as more jobs will be created, particularly highly skilled positions, to develop an end-to-end e-payment ecosystem.

Another sector is the financial sector as many accounts have to be set up for businesses ranging from retailers in the malls to hawkers in the HDB heartland.

Barriers to adoption of cashless payments

One major barrier in the adoption process is the relatively higher transaction fees that banks and financial institutions charge for existing cashless payment platforms in Singapore compared with other countries. However, if users can bite the bullet so that the cashless market can achieve a critical mass in terms of adoption, we could see a significant drop in transaction fees.

Apart from transaction fees, the high cost of setting up the relevant infrastructure could also be a deterrent. It is not as simple as installing a credit card reader – some retailers don’t even have wifi or a point-of-sales system to link it to the ordering system. This is a key consideration as many businesses are small and every cent spent on setting up a comprehensive cashless payment system adds to operation costs.

In addition, staff have to be trained to handle related tasks for such a system, such as accepting payments and handling refunds. Given that tourism is a key sector here, the payment system should be relatively fuss-free and easy to use for the millions of tourists who visit Singapore each year.

New entrants to the local job market can explore training opportunities in companies that are expanding their presence in the cashless payment space. For instance, atomi recently hired two new graduates through e2i’s Place-and-Train programme, who helped set up online boutiques inside physical stores in Malaysia and Hong Kong.

E-payments for the less tech-savvy

We must also acknowledge that not everyone has a smart phone, a credit card or a bank card to go cashless for purchases. The idea of doing cashless payments may be daunting for certain groups of people, especially if they are unfamiliar with English or do not have guidance from others who can help them navigate a whole new world of buying and selling.

Making wifi access islandwide, enhancing security for transactions, implementing training sessions and doing community outreach are some of the measures that should be undertaken to make less tech-savvy users feel more confident in adopting cashless payments.

The authorities have the wherewithal to assist companies and Singaporeans in embracing cashless payments as the new mode of doing business, just as how they have done in planning the smooth transition to digital TV.

The cashless revolution will transform the way we live, play and work. The multifold benefits from cashless payments cascading across industries is a business imperative that Singapore cannot ignore as it continues to restructure its economy.

Andrew Tan is the founder and creator of atomi, a lifestyle store at Mandarin Gallery. He is also a managing partner for atomi Consulting, which advises retail businesses, government agencies and mall owners in Singapore and Japan.