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Going Cashless: Who’s Left Behind?

The hidden side of the cashless discussion.

With Singapore’s move to go cashless in line with the Smart Nation initiative, interest and initiatives for digital and mobile payments are emerging.

As we envision a world where tangible tokens of value is phased out in favour of digital wallets, we look at who may be left behind in our society when we charge ahead in the world of e-payments.

The Unbanked

The way e-payments work today requires an intermediary, whether a bank, a payment platform or a digital wallet. To be able to transact, you will require an account with this intermediary, which holds your money. That means if you don’t have a bank account, you can’t use e-payments to buy food or transport.

While the vast majority of people living in Singapore have registered bank accounts with financial intermediaries, we can’t forget the people who do not.

In some industries, foreign workers and daily-paid labourers usually get paid in cash. According to a report by KPMG, 75% of foreign domestic workers are paid in cash.

Even if they wanted to open a bank account in Singapore, most local banks require a passport, work permit or an MOM In-Principal-Approval (IPA) letter.

The Elderly

The elderly is another group that might face challenges in Singapore’s move to go cashless. This is about 13.7 per cent of the people living in Singapore, or half a million Singaporeans aged above 65.

Cash is tangible, which gives a certain peace of mind to many in this generation. Some senior citizens only use cash in their daily living – because that is how they have managed money all their lives.

In addition, if they find that smartphones or online transactions difficult to adopt, imagine the barriers to entry for linking their bank accounts with other means of digital payments through third-party instruments, such as Apple Pay.

Each senior has varying levels of education, as well as tech-savviness, and their differing needs cannot be neglected. While there are scores of courses available on SkillsFuture and National Silver Academy to help seniors embrace technology, more can and should be done if we want to adopt cashless payments as the norm, rather than the exception.

Cash-Heavy Sectors

Hawker centres, wet markets, charity donation drives and flea markets are places where their payment policies are typically cash-only. Efforts have been made in encouraging hawkers in adopting e-payment initiatives, but the take-up rate remains rather low.

Ultimately, there is no compelling reason for people in these cash-heavy sectors to fix what is perceived as not being a problem.

There’s no compelling reason for people to adopt these new cashless systems, unless they are convinced of the potential of e-payments systems – higher productivity, greater security, seamless and reliable transactions, or strong user demand.

Singapore has made strides in its efforts to roll it out even in hawker centres. However, for the concept to really take off nationwide, more attention needs to be placed on the people on the fringes, or they may be left further marginalised rather than enabled by a cashless future.

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