Singapore makes huge pledge towards digital economy
Singapore’s Education Minister Ong Ye Kung, who sits on the country’s Monetary Authority Board, has announced that Singapore will eliminate check usage by 2025 and “slash” cash withdrawals from ATMs. He made the pledge in a speech delivered on Wednesday, in what might be the country’s most ambitious pledge to embrace a digital economy yet.
Both payment methods are seeing a dramatic decline in popularity, according to the Minister, and Singapore will promote electronic fund transfers through a government-endorsed payments platform, called PayNow, which will be extended to companies from August 13. This system works with “most cashless transaction providers” including PayPal.
Cashless transaction providers held in Dominion’s Global Trends Ecommerce Fund are having a robust year so far
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Ong said: “Our aim is not to be a cashless society, but to use less cash and more e-payments. When the level of convenience and confidence crosses a critical tipping point, adoption will rise across our population within a short time and become pervasive.”
That tipping point may come sooner rather than later. He elaborated that there are already 1.4 million PayNow registrations, and as much as $662 million has been transferred through its system since last year’s launch.
Ong sees this transition as a necessary one if Singapore is going to compete with the world’s financial centers. It is also the furthering of an already existent trend. In 2015, the proportion of checks to electronic payments stood at 37%. By 2017, it had dropped 9%. By 2020, it could be as low as 15%. Describing the next step towards a cashless society as jettisoning checks by 2025, Ong said:
“Sweden has done it. We can too. Our goal is to allow for a variety of payment solutions that are competing yet inter-operable and convenient, providing choice to consumers and encouraging innovation. That is the key principle in our approach to e-payment.”