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IN FOCUS: Is it getting harder to use cash in Singapore – and does it matter?
SINGAPORE: My experiment to use only cash for a week in June got off to a false start. I had gone to Five Oars Coffee Roasters for a meeting, and though the shop only accepted contactless card payments, my drink was paid for by the organiser. I also paid cash for dinner and dessert that evening without a hitch. All good, I thought, until I belatedly realised that I had taken a Grab to and from the meeting, and the rides were paid for using a credit card I had added to my ride-hailing accounts. That's how ingrained cashless payments have become in my life. I knew then that the cashless-only experiment would be much easier, but first, I had to dig into my stash of notes from Chinese New Year and get through a cash-only week. Cashless options have become more mainstream in Singapore, especially after the COVID-19 pandemic accelerated the trend. Some shops and food outlets have even gone fully cashless, but the country's electronic payments journey started decades ago. Back in 1985 – the year after the General Interbank Recurring Order (GIRO) was introduced – the government launched a national campaign to minimise cash transactions. At the time, it was estimated that the government would save S$24.5 million in labour costs if cash transactions were minimised. The campaign sought to encourage Singaporeans to receive their salaries via direct credit, pay their bills through GIRO and use the new Electronic Funds Transfer at Point of Sale (EFTPOS). The implementation of the EFTPOS scheme, which allowed customers to pay for their purchases and bills with an ATM card instead of cash, was said to be the most challenging part of the campaign. It was implemented by a company called Network for Electronic Transfers Singapore, better known as NETS. The company remains a household name, and has adapted to offer contactless card, in-app and QR code payments that are often used today. NO PAYLAH, NO PAYNOW, CASH ONLY All these options, however, were off the table for my experiment. Over seven days, I used cash for every transaction possible – at cafes and shops, and even on public transport. I planned to book a plane ticket that week, but delayed it in part because of my cash-only week. The experiment made me feel a bit socially anxious. I knew that if a shop did not accept cash, I could just switch over to a cashless option, but for shops that did take cash, I envisioned myself counting coins or fiddling with my wallet and causing inconvenience while other customers breezed by with their contactless payments. In the end, I failed to use cash just once, apart from on MRT rides, which have no cash option available. On my first Grab ride during the experiment, I left home thinking I had S$12 (US$9) cash for an S$11.90 ride, and thought I would simply forfeit the 10 cents if the driver did not have any change on hand. Instead, I discovered that I had a S$5 instead of a S$2 note. The driver, Mr P Ananthan, noticed that my ride was tagged 'cash', and wisely asked if I had small change. He then asked if I would prefer to use PayNow when I said I had S$15 in cash. He told me that he only gets around one or two passengers a day who request to pay by cash, and among those who do, there are often young people in their 20s and 30s. 'They use cash to keep track of their spending,' said the 63-year-old. When he first started driving for Grab seven years ago, more passengers used cash, he said. 'Even foreigners are starting to pay by card now.' Mr Ananthan said he does not mind cash or cashless, as long as the passengers pay. But he added that some try to pay for their rides with S$50 or S$100 notes and expect him to have change. He sometimes stops by a petrol kiosk and asks the passengers to buy something to break the note into smaller denominations. 'The problem is (that) they won't say. When they come in, they should ask me if I have change for S$50,' he said, adding that some passengers have told him that he ought to have change for them. Change ended up being the most troublesome part of my experiment, and something that would likely have been less of a problem when cash was more widely used. I also had to pay higher fares on buses when paying cash – S$1.90 versus S$1.19 for a short ride. "Cash fares for buses have been higher than card fares since the 1990s, to reflect the higher cost of cash collection," a Public Transport Council spokesperson said. There were also some inconveniences, such as having to place my order at the counter instead of through a QR code at my table when eating out, and spending more time in a queue at Don Don Donki because the self-check out counters do not accept cash. Only two cashiers manned counters at Don Don Donki, and the queue moved slowly enough that I started to wonder why other people in the queue were not able to use cashless options. Some of them were tourists and were showing the cashier their passports, likely with questions about tax refunds. The upside of having more free counters than cashiers, however, was that while I fumbled with my notes and coins, the cashier who served me did not have to wait for me to be done. She simply moved to the neighbouring counter and called for the next customer. ARE CASHLESS-ONLY SHOPS MORE COMMON? At some Starbucks and Pastamania branches, cash is no longer accepted as a payment method. SushiExpress and sports brand Decathlon have gone fully cashless. Under section 13(4) of the Currency Act, merchants can choose not to accept any or all notes and coins as long as they provide customers with a written notice. 'Vendors have the discretion to decide how they wish to receive payments, as the payment of goods and services is an agreement between a willing buyer and a willing seller,' the Monetary Authority of Singapore (MAS) said on its website. The regulator added that merchants usually consider the value of the transaction, cost of acceptance, convenience to customers and medium of customer interaction. It would not make sense for an online business to accept cash, for example. Decathlon said it decided to go fully cashless in June 2020 to provide customers with a faster, more convenient check-out process. It offers 15 payment options including cards, GrabPay and the ActiveSG wallet. Singapore CEO Stephan Veyret said there have been significant benefits to business since Decathlon went cashless. "We've seen a notable improvement in operational efficiency and security, and this has allowed our teammates to focus their energy on what they do best: Interacting with customers and providing expert advice to support their sports journey," he said. But Mr Veyret acknowledged that there may be "rare instances" where students such as seniors, students or tourists are only able to make cash payments. "Our team mates are trained to assist these customers directly to manage all payment methods including cash, if absolutely necessary," he said. Starbucks said that 39 of its stores in Singapore are fully cashless, while its other locations accept both cash and cashless payment. The coffee chain has around 140 Singapore outlets listed on its website. A spokesperson said the decision to transition some outlets to cashless-only was made in 2020, guided by 'customer profiles and store-specific considerations'. Starbucks said it is committed to meeting the needs of its customers and will evaluate further changes on a store-by-store basis. 'In particular, stores frequented by tourists or those with a higher likelihood of cash usage will continue to offer cash payment options,' the spokesperson said. MAS said its vision of creating an e-payments society is centred around making payments between individuals "simple, swift, seamless and safe". A majority of Singaporeans may eventually use e-payments for daily transactions due to the convenience of it, the central bank's spokerperson said. "At the same time, a balanced approach recognises that some members of the community may still prefer or require cash options. MAS seeks to be inclusive to ensure that no one is left behind as we advance our e-payment capabilities." According to MAS data, e-payments doubled from S$627 billion in 2018 to S$1.25 trillion in 2023, and ATM withdrawals dropped by 10 per cent over the same period. More than 90 per cent of Singaporeans between the ages of 20 and 75 have also registered for PayNow. "While e-payments adoption has grown over the years, most merchants in Singapore still accept cash. MAS' aim is not to force a cashless society, but to enable individuals and businesses to enjoy the convenience and efficiency of e-payments." The spokesperson said MAS and the Singapore Payments Council engages small businesses and merchants to understand their needs and concerns regarding e-payments. 'EVOLUTIONARY RATHER THAN DISRUPTIVE' An increasing number of shops and restaurants are going cashless, and it is likely that more and more businesses will go in the same direction, said Ms Lim May-Ann, director of multilateral relations, data policy and partnerships technology consultancy firm Access Partnership. But anecdotally, she said there still seems to be a large number of businesses that accept cash. 'From a risk management perspective, more options rather than fewer will always mean greater business resilience and continuity in the event of an emergency and outage,' she said. MAS said Singapore's e-payments infrastructure is generally robust, but businesses must plan and prepare for contingencies. "They can benefit from having alternative payment options, including cash, and not be over-reliant on a single e-payment provider for time-sensitive transactions," the spokesperson said. Singapore Computer Society (SCS) said cash is still accepted in most places. The spokesperson said MAS has made it clear that financial inclusion remains a key priority. 'Singapore's approach is evolutionary rather than disruptive – giving consumers and businesses time to adapt at their own pace,' said the infocomm and digital media society, which has published articles on cashless trends. On a visit to Parkway Parade, I checked out more than 50 shops – including food and beverage, tech appliance and clothing stores – and the vast majority accepted both cash and cashless payment. At a nearby hawker centre, all 42 stalls that were open accepted at least cash and QR code payments. Most heartland shops in the area allowed cash and cashless options, though some had minimum spending requirements for cashless payments. One drycleaning shop had a sign that said it would only accept cash, and the elderly lady manning the store said her customers have no issues with paying cash. Ms Lim of Access Partnership said older people who run businesses may not see the need to upskill in this area, while other businesses may not want to pay for the digital infrastructure needed to accept cashless payments. 'All my customers know that my stall only takes cash, especially the regulars, they always bring cash, even the children,' said wanton noodle and laksa hawker Ms Ng Siew Lian, who is nearly 70 years old. For customers who do not bring cash, Ms Ng said she still serves them, and asks them to pay her back another time. She has been running the stall at ABC Brickworks Food Centre with her older sister for more than 40 years, and they even pay their suppliers in cash for the noodles, meat and vegetables that they use in the store. Asked why they do not accept cashless payments, Ms Ng's sister said both of them do not have mobile phones. 'Our friends will call our landline if they want to reach us. When we are at work, we have no time to look at handphones anyway,' said Ms Ng. She added that as long as her customers are okay with paying cash, she does not see the need to accept other payment methods. "I tell people that when they come to a hawker centre, it's good to have cash, S$10 would be enough for a meal and a drink." For a high-volume cafe, operational efficiencies and an appeal to tech-savvy customers can justify the fees incurred by cashless options, said Dr Lee Yen Teik of the National University of Singapore (NUS). 'In contrast, for a hawker with thin profit margins and a clientele accustomed to cash, these same fees may represent a material cost not easily offset by operational gains,' said the senior lecturer in the School of Business's finance department. He noted that the Hawkers Go Digital programme and its fee subsidies have been extended to the end of this year to mitigate this financial barrier. But Dr Lee said technology adoption is ultimately driven by a 'pragmatic evaluation of its net value to a specific commercial operation'. That perhaps was the case for Mr Anthony Low of Xin Sheng Ngoh Hiang Prawn Cracker. In 2023, he told CNA that he stopped accepting digital payments after finding discrepancies between the earnings reported by his stall assistants and the amount that reached his bank account. Just two months later, he went back to e-payments. He said he put a pause on cashless transactions because he wanted to ensure that everything was in order. 'After checking, it (was) proven to have no issues,' he said. 'I also realise more and more customers, especially younger generations (are) using cashless payments.' Mr Low, who is chairman of the hawker division for the Federation of Merchants' Associations, Singapore, added that digital payments are convenient and will help businesses. Still, some businesses are sticking with cash for now, including salon chain EC House, which has nearly 30 outlets in Singapore. Customers put S$2 and S$10 notes into a machine to purchase a ticket, which has a queue number on it. The ticket is given to the hair stylist when it is your turn for a hair cut. On its website, the company said using a ticketing machine frees up the hair stylists from handling money. JUST HOW CASHLESS IS SINGAPORE? Singapore has made 'significant strides' and has a robust digital payment infrastructure, said SCS. 'Compared to other Asian countries, Singapore is among the more advanced, on par with places like South Korea and Hong Kong in terms of infrastructure, though countries like China have seen wider adoption due to the scale of platforms like Alipay and WeChat Pay,' the society's spokesperson said. Cashless payments are so pervasive in China that some tourists find themselves unable to spend the cash that they brought into the country. To address this issue, the government has even issued a directive to markets, pharmacies and eateries to accept cash. In Singapore, MAS said tourists can make e-payments through international card schemes like Visa and Mastercard, or through SGQR, which combines multiple QR codes into a single label so that consumers can use any payment application to scan it. Tourists can use their "native payment applications" to scan the SGQR code. Still, some may not be able to use QR code payments. "I've had a number of friends and visitors to Singapore who have come in and faced this limitation, so they had to switch to using credit cards," said Ms Lim. "They were effectively 'locked out' of a lot of local heartland transactions like buying hawker food or visiting the pasar malams and other smaller shops without credit card payments," she said. 'This is definitely a big limiting factor for visitors." For locals, Dr Lee of NUS said we are seeing the 'natural friction' that occurs when new technology meets long-standing daily habits of using cash. 'So while the infrastructure is in place, true and society-wide adoption is a much more human process that will simply take more time. A YouGov survey of more than 1,200 Singaporean adults commissioned by Stripe found that cash remains a favoured payment method for in-person transactions as of June 2024. Stripe is a payment processing company that allows shops to accept online payments such as through debit cards and credit cards. Survey respondents were asked to pick three payment methods that they most favoured for making in-person payments, and 69 per cent picked physical cards while 60 per cent selected cash. In time, however, the survey suggests that cash will fade out. 61 per cent of respondents believed they would stop using cash for in-person payments in 10 years' time. "Singapore is rapidly accelerating toward a digital-first economy, and we see this through evolving consumer attitudes and usage towards cashless options such as real-time payments, digital wallets and BNPL, reshaping how money moves," said Mr Paul Harapin, Stripe's chief revenue officer for Asia Pacific and Japan. He added that the future of payments and commerce will be defined by speed, trust and borderless global access. As things stand, the growing popularity of going cashless has already raised some concerns. Seniors who may be less educated will find it challenging to learn how to make cashless transactions, though many have learned and adapted over the years. 'The use of cashless (options) has become part of our lifestyle and routine, seniors are more confident,' said Dr Kelvin Tan, who heads a programme on applied ageing at the Singapore University of Social Sciences (SUSS). He added that they have begun to trust technology and have positive experiences using it, with Community Development Council vouchers helping to motivate them to learn. DBS said its e-payments workshops, conducted in partnership with the Infocomm Media Development Authority (IMDA), reached around 37,000 seniors from 2022 to 2024. IMDA contacted the seniors after the workshops and found that they were more confident about e-payments, and 83 per cent successfully completed at least one cashless transaction since attending the class. Another concern is that online payments – though more secure in some ways – come with new risks and dangers. 'Lurking in the cyberworld of cash transactions can be a world of scams, dark forces and hackers,' said Dr Tan of SUSS. 'Digital technology opened a new world of possibilities and can of worms too. Unprepared users might not be ready for the cost of privacy and data protection,' he said. Parents and guardians may also need to put caps on transaction limits to prevent their children from getting scammed, said Dr Tan. A DBS spokesperson said the bank's staff volunteers share anti-scam security tips and tools during digital literacy workshops for seniors. "We have taken care to prioritise anti-scam awareness to ensure seniors are well educated on scam tactics prior to their adoption of digital or cashless transactions." Dr Lee recalled an outage in 2023 that left shoppers stranded and unable to pay for their purchases, and said cash still has an important role, noting that it 'offers a degree of privacy' that digital payments do not. 'Importantly, cash is the ultimate backup plan; it works without power or an internet connection.' The MAS requires financial institutions to recover from critical outages within four hours, but that does not solve the problem at the point of sale, he said. 'A truly strong system has backup options at every level,' said Dr Lee. 'This means considering simple and low-tech alternatives and, most importantly, ensuring cash remains a viable and accepted option so there is always a fallback that works.' During my cashless-only week, I did not need to fall back on cash, and paying using my mobile phone felt natural and effortless – unlike the mental calculations I had to do earlier to make sure I had enough cash. I also did not come across any cash-only shops that week, although I recall having to cancel an order at a stall in Ayer Rajah because I only had S$2 in cash and the hawker did not accept any cashless options.
