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Will the new Singapore QR (SGQR) succeed in displacing cash payments among hawkers, food stalls and wet markets?
13 May 2018
Market Insights | Financial Services

In the modest Singapore, where cashless payment options thrive, consumers wish to fish for physical notes and wiggle coins to pay for goods and services. Last year, 60% of consumer transactions were made in cash - a huge spanner in the works for Singapore's Smart Nation drive.

At National Day Rally speech on Sunday, Prime Minister Lee Hsien Loong distinguished Singaporeans' highly connected lifestyle and digital literacy with their unwillingness to go digital when it comes to payment. As such, Singapore lags behind other cities on this front. With many different payment schemes and systems that act as obstructions, confusing people, he made a call to the industry to "simplify and integrate".

In compete with leading countries; Singapore has to play catch-up with places like China, where everybody in key Chinese cities is scanning a QR code and paying with digital wallets using WeChat Pay and Alipay. The process is extreme simple as creating an email address. The Chinese use digital wallets which are linked to the their bank accounts and pay with a QR code from mobile wallet and most of the retail, restaurants and all B2B & B2C accept this payments also at roadside stalls and in taxis. Waiters at restaurants can be tipped in the same cashless way.

Till date- cash might be king, but there is always a cost to handling it - from the time taken to count it, to storing it securely, and then banking it. 


In several ways, Singapore is a victim of its own success by making everything available at nearly door step of its people. All major banks at Singapore like DBS Bank, POSB, OCBC Bank and United Overseas Bank - collective have about 2,000 ATMs island wide. For every half a km there is an ATM from most people's homes, making cash easily available.

There are many pros in implementing digital payments like one can overcome the concerns over fake money and the panic of being robbed – it is the key success of digital payment systems which drove China's cashless revolution.

As pros there are cons as well with digital payment. The people in Singapore feel safer with their cash. And, some had a bad experience with wrong electronic transfer charges and vowed to stay away - at least from its use in certain apps.

The one of incident portrayed by an account manager Kelly Kin, 29, after once having been wrongfully charged by a local ride-hailing app: "I have gone back to using cash in the app ever since."

The subchardes in Singapore in using electronic payment is another reason for the back step. For example, Golden Village and Sistic too charge customers at least $1.50 extra for the convenience of buying a show ticket online with e-payment schemes. Also, a 3% transaction fee is imposed on merchants for accepting Visa and Mastercard payments. The same fee applies when they accept mobile wallets such as Apple Pay, Android Pay, and Samsung Pay - which are layered on the existing credit card infrastructure. Other online payment options like PayPal and Stripe charge more transaction fee of 3.9 per cent and 3.4 per cent, respectively.

Business owner Lim Jialiang, 27, said: "You will want people to make payment in cash when a 3 per cent transaction fee hurts your margins."

“In Singapore, merchants typically pay about 3 per cent in credit card fees. Even at a large retail chain like Courts Singapore, the cost of accepting cashless payments at its 14 outlets is now about three times higher than the cost of accepting cash”, said by Singapore chief executive, Mr Ben Tan, told The Straits Times.

But with critics on other side, SINGAPORE - Customers at the Tanjong Pagar Plaza Market and Food Centre can now pay for meals with a scan of their mobile devices.

This comes as payment network Nets launched its standardized QR (quick response) code, which is able to accept various payment types, at a hawker center for the first time on Saturday (Sept 9).