Singapore shift to cashless unlikely in near term
(12 March 2019 - Singapore) Despite a government led target for cheque free payments by 2025, a recent report by S&P Global Ratings reveals cash and cheques continue to account for up to 40 percent of payments in Singapore.
Several major industries and demographic trends are working against the shift to cashless, with many consumers hesitant to adopt mobile payment alternatives.
The main roadblock to broader uptake of mobile banking platform continues to be cybersecurity and fraud. Security concerns in mobile banking apps rose from 34 percent in 2017 to 41 percent in 2018. Increasing availability of digital payment methods is unlikely to automatically alter consumer behaviour. The report suggested the availability of multiple mobile payment options like NETSPay, DBS PayLah, GrabPay and Alipay only serves to confuse and possibly discourage consumers from going cashless, creating more complexity for merchants that have to maintain multiple terminals and apps to meet consumer payment acceptance expectations.
Although the government has rolled out the Singapore Quick Response Code (SGQR) in September 2018 to combine multiple payment QR codes into a single SGQR label, regulators are being called on to do more to reduce the number of available options to surface the best possible payment alternatives
“We believe the transition to a cashless society will be a gradual one given the ageing demographics in Singapore. On a behavioural basis, the older population segment is more resistant to change and will likely prefer traditional or bricks-and-mortar banking,” said S&P Global Ratings Analyst Ivan Tan.
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