Cashless smart nation in 18 months?

Three main themes in PM’s recent National Day Rally speech – Diabetes, Pre-school education and Cashless Payments. It’s about kids – the hope of Singapore, the health of the citizens and the future economy of Singapore. I think he’s the only leader in the world to go on national television to exhort citizens to eat wisely, exercise frequently and take care of our health!

I’ll just touch on cashless e-payments. PM quoted China using e-payments way ahead of us. He admitted that we need to catch up. People in China are using “WeChat” which is similar to our WhatsApp, to transfer money, pay for goods and services by scanning QR or Dox Matrix codes. Read about cashless payments in China here.

Just to side track, China opened up its closed economy in the mid 1980s in Shenzhen; next to Hong Kong, whereas we started our industrialisation in 1965. We are not only a tiny country with high level of western education, we also had at least 10 yrs lead time ahead of China, yet they have now overtaken us by leaps and bounds in so many areas.

Just visit their first tier super cities in China and you will be awe struck by the tremendous progress in terms of infrastructure – the super highways, longest land and sea bridges and yes their train system – high speed and normal speed zig-zagging all over the vast country from the coastal regions right up till Lhasa in Tibet! These are their symbols of success and their pride showcase for all the world to see!

Look at their super efficient train system almost on par with the Japanese and the world’s best. Are they bothered about driverless trains? Here, we are obsessed with converting our aging train system to driverless trains resulting in so much woe and misery.

Back to the cashless topic. As usual, when the most powerful man says something, all will take the cue. Suddenly, all got jolted awake and the scramble to go cashless begins as if it’s something new.

Let’s forget about the credit cards such as Visa or Master as they did not originate from Singapore. Let’s take a look at Nets which has been around for a long time. Why is it not pervasive? If you use Nets to pay for taxi fare or buy 4-D, you are charged 20 cents per transaction. If you use it in other shops, the merchants will have to pay monthly subscriptions for the SIM card, terminal and 0.80% to 0.60% fee of turnover to Nets. More often than not, merchants don’t encourage you to pay by Nets unless you willing to pay extra on top of existing prices. In a nutshell, it basically explains Nets’ low adoption rate.

After Nets, Nets Flash, EZ Link, Dash, PayLah and very recently PayNow came about. Are we short of e-payments? For a small tiny nation with everyone holding a smartphone with access to all these homegrown modes of e-payments, not to mention Apple Pay and Samsung Pay via NFC, why is it that the PM still had to talk about e-payments?

“Thanks @minliangtan! Make me a proposal, and I will study it seriously. — Lee Hsien Loong (@leehsienloong) August 23, 2017”

Link

Out of nowhere, one enterprising entrepreneur gained instant fame and recognition (many of us did not know about him or his company) when he simply tweeted that he could fulfil the Prime Minister’s dream within 18 months! No need bidding or rounds of meetings. Just tweet it to the most powerful man and it’s done. (worth millions of contract of course) Hopefully, he will succeed and all of us stand to benefit from his proposal even though the other modes of e-payments are without much success.

My question is “Why re-invent the wheel?” When we ask ourselves why the need to kickstart another e-payment system when so many retailers have got Nets or EZ link terminals with everyone, young and old holding one or two smartphones?

For more than 30 years since Nets came into the picture in 1985, we have yet to achieve 100% cashless smart nation. Link  Yet our local entrepreneur via a tweet had the audacity to declare publicly that within 18 months he could achieve the impossible! Let’s wish him success so that all of us could just throw away the many cashless cards in our wallets. We only need one universal card (or no card via a smartphone) for everything instead of so many. 

I think the EZ link card is the best so far. Link Nowadays, we hardly see people using cash to pay for bus or train rides. Unlike Nets, I could even use it at the neighbourhood convenient store to pay for things without incurring any surcharge.

Now, they are trying to enforce it in the hawker centres on a pilot basis. Will it take off if there is extra surcharge incurred? Do the hawkers need to pay for the cashless terminals? Do consumers have to pay extra using e-payments like Nets charging both a fee for using their system? Many are suspicious that e-payments introduced in the hawker centres is a form of tracking hawkers’ revenue for the purpose of taxation. Is that the case?

As such, there are so many nitty gritty issues that need to be ironed out before we could declare ourselves a fully smart cashless nation. To say that “within 18 months” we could achieve that kind of cashless infrastructure island-wide is an ambitious over statement. Will it materialise? Only time will tell.

Read related article here.

Government crowdsourcing cashless system at hawker centres and heartland shops.

Why communism fails? Backward China decided to open up to the outside world.