“Going Cashless”, “Cashless Revolution is Happening”, “No Cash Accepted” headers are all over the news and have raised public concerns. The question being asked is “Can we go cashless COMPLETELY”? Well, that is the answer for us to find out.
The number of smartphone users are expected to rise by 0.3 billions in 2021. The evolution of technology continues and the shift towards mobile commerce has become more apparent and necessary. One of the biggest moves by many developed countries is to implement mobile payment services such as digital wallet, also known as “e-wallet”. E-wallet is a type of virtual wallet where users can send, receive, and store money, and pay for purchases through their smartphone. This move has indeed garner support from millennials as they can simply make payments through the app conveniently. With cash, it is easy to steal money, whether the amount is large or small. Thus, lower crime rates may be seen with payments made via the e-wallet since transparent transaction is recorded.
Most importantly, whenever one visits a foreign country, they might need to purchase local currency. However, payments become easy when the two countries are able to handle cashless transactions, that is, the mobile is handling everything for you!
Sweden and China are the most notable countries that are enforcing a cashless society and Sweden is expected to become the world’s first cashless country in March 2023. This means that cash will not be accepted as means of payments in Sweden even though it is legal tender. Currently, Swish is a mobile payments system which is used by almost two-thirds of the Swedes. Whereas in China, Alipay is the most commonly used e-wallet by the locals.
Singapore is also on its move towards cashless society with DBS Paylah! and GrabPay topping the chart. Government announces plan to make Singapore a Cashless Society by 2025. Let us now take a look at the 2 successful e-wallet apps – GrabPay and Alipay that are highly recognised in Singapore and Globally respectively.
1 | GrabPay
“We drive Southeast Asia forward, by
elevating the quality of life for everyone.“
Grab Vision Statement
Grab is founded in June 2012 and GrabPay is considered the most popular e-wallets in Singapore, including the users who are using its app for other services including ride-hailing, food delivery and funds transfer. The GrabPay app enables people to track their transactions and earn GrabReward Points for redemption. With the great convenience as well as personalised benefits, people are looking forward to using GrabPay more often in the future.
Recently, Grab announced the launch of GrabPay Card Asia’s first numberless card that offers users exceptional card security, access to an expanded rewards platforms and hassle-free Grab payments integration in order to bring cashless convenience to millions in Southeast Asia. To ensure Grab provides the best experience for all their valued users, only certain Grab users are currently selected for the product’s experimental stage. Once everything is in form, Grab will be progressively opening this GrabPay Card to the public. It will be ruled out to Philippines in the first quarter of 2020, with other Southeast Asian countries to follow in the first half of next year. As soon as all the Southeast Asian countries implement the use of GrabPay card, customers are able to make payments using the virtual GrabPay card as long as the stores accept Mastercard.
2 | Alipay 支付寶
“We aim to build the future infrastructure of commerce. We envision that our customers will meet, work and live at Alibaba. We do not pursue size or power; we aspire to be a good company that will last for 102 years.”
Alibaba Vision Statement
Alipay is launched in August 2004 by Alibaba with 110 countries being involved. It is considered one of the popular mobile payment apps in China and many people make payments with QR code on their phone. Foreigners who visited China find it difficult as not many places accept foreign cards like Visa and Mastercard. A Chinese bank account is required in order for people to use Alipay, causing the foreigners to turn to cash instead.
Fret not, Ant Financial, the operator of Alipay announced that Alipay is supporting international debit or credit cards from November 2019 onwards, including Visa, Mastercard, Japan’s JCB and Singapore’s Diners Club cards. Users can simply register for the international version of the app using their foreign mobile number.
Users can then top up money onto a pre-paid virtual card and begin using Alipay across China.
Alipay is more than just a payment app. It has become a new lifestyle as well. Alipay’s overseas promotion facilitates Chinese people’s overseas consumption, and can also help overseas merchants to promote their products.
The Future of E-Wallets
Despite the increasing cashless society trend, the presence of drawbacks to the use of digital payments are conspicuous.
Fraud Risks
In a 2016 survey, Accenture found 21% of respondents were reluctant to enter their payment card details into their smartphones, and 19 percent said they believed paying with their phones could lead to fraud. Moreover, it is known that Security breaches have increased by 11% since 2018 and 67% since 2014. This is especially worrying if they accidentally lose their phones and the possibility of the thefts to retrieve the information is high.
SOLUTION:
The Best way to keep a thief out of your phone is to require TWO-FACTOR AUTHENTICATION to unlock it – Ideally, a PIN combined with a Biometric method such as Fingerprint, Facial Recognition or an Iris Scan.
creditcards.com
Low Perception
Many consumers perceive that the use of e-wallets payment do not solve anything and thus, they prefer to continue to use physical cards or cash. Data from a new study by Visa Singapore of 200 consumers here aged between 50 and 80 years old showed that although many are active users of smartphone communication apps, the use of digital payments on their phones is low. Elderly especially are reluctant to use virtual payment cards because of the fear that they might key in the wrong amount or pin number due to their poor eyesight. Lack of education also makes it difficult for them to pickup digital payments.
SOLUTION:
The respective Finance Firms should conduct theory and hands-on workshops to educate the elderly and convey the ease of using digital payments. This helps the elderly to be smart nation ready with everyone else.
There is no qualms about whether the developed countries are able to go completely cashless with the availability of advanced technology. However, one needs to take into account the people’s perception towards cashless society. If people are adamant that they will not use digital payment, going completely cashless is unfeasible. It is also important to take note that bank accounts and credit cards are not universally available to everyone and these people only rely on cash for survivals. Eliminating the cash options would do them difficult and inconvenient, in which they have to sought for other options that could incur onerous fees.
Time will decide whether going completely cashless is a good move or if it is even possible. Until then, you can decide if you are willing to make this change to go digitalise. Do let me know your views on whether you support or oppose to cashless society.
Katrina's Blog 
Hi! I personally find that the cashless payment setting has brought convenience to many. For enterprises, this means secured payment. Especially in China where there are many fake notes going around, companies have to implement screening methods to safeguard themselves.
That being said, there are trade offs to any sort of solution. I agree to your point regarding fraud risks as sensitive informations are now even more vulnerable to data thefts.
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Hi Angela! Yes, I saw that China encountered a problem with fake money in the news too. One of the most serious cases in the modern history of China was that the fake bank notes with a total face value of more than 214 million yuan (S$44 million) was seized by the police in 2018. Ever since the WeChat Pay and Alipay were ruled out to the public, many claimed that it has made payment handling more convenient and safe as they were nervous about receiving counterfeit notes.
It is true that every new system being implemented has its risks. Thus, it is important for everyone to be taking precautions proactively, such inputting TWO-FACTOR AUTHENTICATION and constantly check the transactions to safeguard yourself from potential risk. Please report to the police if any unknown transactions are observed.
Thank you for sharing your thoughts with me! Looking forward to hear from you more often in my upcoming posts! 🙂
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Hi! I would like to ask, do you personally feel that it is possible for the future society whereby physical cash on hand is completely removed and cashless payment methods are used from all parts of the world? Hope to hear from you soon!
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Hi Yu Qi! Like what I have stated in the blog posts, unless bank accounts and credit cards are universally available to everyone, including the less developed countries, if not, going cashless completely in all parts of the world is impossible. Moreover, a consistent and reliable access to the Internet is necessary in order for transactions to take place. Checking balances, making payments, and receiving deposits all require internet connectivity. There may be disruption to the Internet access. Lastly, going cashless is not equivalent to no risk. There are instances where privacy and security breaches still take place in the digital era.
In all, cashless society is still a long way off. Hope this answers your queries!
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I think that going cashless is good but I would oppose to going cashless completely. Personally, I feel that going cashless can be convenient and safe as you stated in your blog post. However, I feel that the adoption of both online transactions as well as cash as modes of payment are just nice, and there is no need to go to the extreme. Personally, I like the idea of using the virtual GrabPay Card to make transactions because it would make it easier for me to purchase products online especially since I like to shop for things online and I do it as a way to release stress. I like to do things in a quick and efficient manner and I believe GrabPay card would allow me to do that easily. However, I think that it would not be feasible to make all Singaporeans use this method to make payments because as what you mentioned in your blog post, old age is an issue due to the lack of education which makes it difficult for the elderly to pick up digital payments. Even though the elderly can be educated on how to use these apps, but it would be extremely difficult to enforce it throughout the nation because it is unrealistic. Personally, I feel that it is good that Singapore wants to advance itself into a high-technology society. However, I feel that at times Singapore is being unrealistic and extreme when it comes to matters like cashless transactions. Do you agree with my view Katrina?
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Hi Serene! Thank you for your opinion! It is true that Singapore aims to be a cashless society in 2025, but Education Minister and Monetary Authority of Singapore board member Ong Ye Kung has said that “We don’t need to be literally a cashless society – some people will always find cash useful – but we certainly can transact with a lot less cash, and we won’t need to visit the ATM so often.” The government aims to go cheque-free by 2025 with online payments – PayNow Transfer to replace it. I believe Singapore government has taken into account all the plausible factors before releasing the official statement to the public. I would not say that Singapore is being unrealistic and taking extreme measures, but rather, they are definitely taking steps to uncover the possibility of going cashless and making amendments, depending on the situation. If Singapore was to go completely cashless one day, Singapore government would definitely come up with measures to help those who are in need to ensure smooth transition from cash to cashless practices. Let me know your thoughts on this!
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I oppose to cashless society and heavy reliance on smartphones for transaction.The easier it is for making transactions, this means that it is much easier for anyone to use our phone for transactions without our knowledge. There are also a few transactions whereby it is much easier to use cash for payment. Furthermore, people can also peep into our phones to get essential information when we are trying to do payments which could pose a danger to our personal information as people can use it to do their own purchases. Therefore, I personally would prefer a society where at certain scenarios, we use cash and on other scenarios, use cashless form of payment.
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Hi Gordon! I agree that we do not require to use cashless mode of payment for every instances! For example, when you are on a budget, paying by cash forces you to hold accountable for your money than e-wallets. Using cash, it is easy to see how quickly they empty your wallet.
With regards to the security and privacy issue, it is no doubt that the possibility of other people retrieving the personal information is high, however, you can take steps to protect yourself from such intrusion of your privacy. One example would be the one I have stated in the blog post, which is to set two-factor authentication. Also, if you see any unauthorised transaction that was not made by you, immediately make a police report and contact the bank to cancel the card and replace with a new one. There is always a risk whether you are using cash or e-wallets to make payments. Thus, it is important to practice personal protection measures, especially for personal e-wallets.
Thank you for sharing your thoughts!
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Hi Katrinaa19 🙂 I love how you summarizes the e-payment function, showing how these companies are venturing into a cashless future. To add on the risks of going cashless, I personally feel that we are becoming more dependent on technology. Do you think we will become crippled if we are solely relying on cashless payments? When our phone battery runs flat, the things we can do becomes limited. What do you think?
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Hi Shi Yu, it’s great to hear from you again! I would actually agree that we will become crippled if we are solely relying on cashless payments. Up till now, the phone technology is not that advanced yet where phone battery can last forever. When one’s phone battery runs out, there is no way that one can use his/her phone to make payment and this is when hard cash is necessary in this kind of scenario.
Moreover, poor connection is likely to occur at anytime and anywhere. Once the connection is disrupted, there is also no way for people to make application payment.
Going cashless payment completely may seem workable, however, the cons of cashless payment are definitely visible concerns that question the claimed of going cashless. With respect to my blog post, it doesn’t seem appropriate to go completely cashless provided the cons are fully resolved.
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You said it well! There must be alternative available before we can go completely cashless.
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Hi Katrina! As there are many different e-wallets available in Singapore, do you think it will complicate things in-store and pose a problem to retailers when they are receiving the payment?
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Hi Charlotte! It wouldn’t be a problem as it will be handled by a third party processor. The employees (retailers) just need to know how to utilise the app to check if payments are received and transferred the payment to the bank at the end of the day. The store in-charge needs to guide the employees and ensure that the amount in the Point-of-Sale system matches the amount in the app.
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