Singapore is a technologically advanced nation, right? Well, yes and no, depending on how you look at it.
In fact, some may even call us “backward”.
During the National Day Rally on Sunday night, Prime Minister Lee Hsien Loong told the story of how Manpower Minister Lim Swee Say had a “suaku” (country bumpkin in Hokkien) moment at a street stall in Shanghai.
Mr Lim was queuing to buy chestnuts when he saw other customers waving their phones when making their purchase. Thinking they were doing so to get a special discount, he told the stall holder that he would be paying the full price.
Soon after that, he realised that the customers were actually scanning the stall’s QR code with their phones to make payment through an e-payment system.
In recent years, China has become a huge adopter of e-payment systems. Even roadside stalls and landlords accept payments done through mobile apps such as Alipay and WeChat.
“In major Chinese cities, cash has become obsolete. Even credit and debit cards are becoming rare,” PM Lee said in his speech.
Data from iResearch has shown that a total of $8.8 trillion (S$12 trillion) flowed through Chinese mobile wallets in 2016, and this number is expected to grow massively over the next couple of years.
Singapore, in contrast, still relies heavily on cash and cheques.
Although e-payment systems have been introduced here for some time, most people and businesses prefer to transact using real money because e-payments are seen as cumbersome and costly to maintain.
“We have too many schemes and systems that don’t talk to each other. So people have to carry multiple cards and businesses have to install multiple readers,” PM Lee said.
“It’s inconvenient for consumers, (and) it’s costly for businesses. And the result is most of us still prefer cash and cheques. Six in 10 transactions are cash and cheques.”
This often surprises visitors from countries where e-payments have become the norm.
“When visitors from China find they have to use cash here, they ask: ‘How can Singapore be so backward?’,” PM Lee said.
The Prime Minister’s concern is not a new one.
In the past year, a number experts in Singapore have voiced concern over the city’s less-than-enthusiastic reception of e-payments.
When Business Insider spoke to Google’s head of marketing solutions for Singapore, Malaysia, Philippines and Emerging Markets in July, he told us that Singapore’s reliance on cash is a major factor delaying the rise of e-commerce here.
Rahul Shinghal, general manager of PayPal in Southeast Asia told Business Insider on Monday that there is a need for Singapore to stay ahead of the curve – especially in the realm of technological innovations – if it wants to remain economically viable and relevant on the world stage.
“Digitalisation of payments and processes will go a long way in improving systems and productivity, enabling our Singapore SMEs to stay ahead. Hence innovations in these areas must be able to identify and address gaps and pain points, not just innovate for the sake of innovation,” he said.
In a similar vein, Jayajyoti Sengupta, Cognizant’s head of Asia-Pacific, called PM Lee’s message “very timely”, adding that Singapore’s Smart Nation initiative “must inspire bold decision-making on part of business leaders to drive digital innovation”.
Mobile e-payment systems bring with them a number of benefits for both consumers and businesses, ranging from convenience to lower operating costs.
But with new technology comes new risks, and FinTech providers in Singapore must be equipped to deal with a new type of cyber risk.
“Cashless payments no doubt deliver convenience, ease of transaction and allow individuals to better keep track of spending. At the same time, we’ve seen a rise in text message scams called ‘smishing,’ which can infect smartphones and result in the theft of personal information,” Sanjay Aurora, managing director of Darktrace in Asia-Pacific said.
While there are many cyber threats out there today, solutions are also on the rise, Mr Aurora said. Governments around the world, including Singapore’s, are now focusing on how AI can be used to halt novel attacks.
If Singapore wants to move forward in its Smart Nation initiative, it is imperative that the government, businesses, banks and consumers are all on the same page.
The technology is already here. The only question now is: How do we move forward and embrace it in a way that benefits us?
It looks like Singapore is on track to becoming a cashless society, but a lot needs to be done to get the movement going at a faster pace.