Why cash still holds value in an increasingly cashless society

When the service staff asks you “Payment by?” during checkout, how would you respond?

Most might opt for cashless services like NETS or Visa PayWave for a more convenient and hassle-free way of purchasing items.

Singaporeans’ most used payment method is that of contactless cards, especially when it comes to retail, convenience store and supermarket purchases. Other contactless methods like mobile and QR code payments follow close behind.

Youths can also register for personal banking accounts and debit cards at age 16, which gives them the ability to simply tap and go when buying things.

Since the emergence of standardised digital payment methods like PayNow and a unified card terminal, its presence in Singapore is significantly higher now. Cashless payments were also advocated for by Prime Minister Lee Hsien Loong during his 2017 National Day Rally speech due to its convenience, safety and lack of a credit card fee.

Despite this concerted shift as a nation, some recognised that there are still moments where it might be wise to have cash on hand. 

When DBS Bank’s digital services faced disruptions twice in under two months, many of its customers were unable to access their digital and mobile banking services for hours. This included physical ATM and card services on the May 5 disruption.

Republic Polytechnic Mass Communication student Fisqtina Asyura had initially offered to pay for a friend’s meal, only to eventually have her friend pay on their behalf instead as her card transaction got declined.

“We wanted to shop around the mall afterwards, but couldn’t due to the disruption,” Fisqtina said. The 20-year-old and her friend spent the next hour of their hang-out window shopping before she regained access to her card payment services.

After the incident, she now carries at least $10 or so in her wallet when heading out for school or outings as a safety net. It puts her at ease as she can fall back on it should another disruption occur.

For some others, having cash serves as a way to help them visualise their spendings.

One such person is PSB Academy 19-year-old student Amanda El Husna Binti Haryanto, who finds it easier to stick to her budget when she uses cash.

“Having that physical reminder of how much money I had left in my wallet definitely helps me decide if I really should buy something or put it back on the shelf,” Amanda said.

This also keeps her savings and impulse control in check, she added.

Businesses, on the other hand, have their own reasons to choose cash payments over cashless options.

Some hawkers, provision shops and other local small businesses still insist on only accepting cash. A good portion of this community consists of those who are not born in a digital age. 

While Singaporeans and many businesses are shifting more focus onto cashless payments, the older generation find it hard to fully understand how services like PayNow or SGQR work. Tracking transactions online also proves to be a challenge for some.

According to a report by CNA, some hawkers are also worried about dishonest customers and fake transaction proofs. 

While 70 per cent of hawker stalls accept e-payments now, such transactions are hard to track during peak periods as stall owners are rushing to cook, serve and take in orders at the same time. As such, some have been fooled by customers that have “transferred” the money over.

Hence, choosing cash payments as their preferred method of transaction is how they reduce the risk of getting exploited.

As the older generation tries to adapt, youths could look at playing an active role in helping them make the adjustments. 

This can be done by guiding their parents and grandparents on how digital transactions or the various online banking apps work, and how to track a day’s or month’s profits. Equipping them with ways to identify scams might also be a good start. 

While cashless payment is undoubtedly the dominant method of transaction, we should be reminded that it cannot wholly replace the use of cash. Our coins and notes could still help us stay accountable over our spendings and profits, or serve as an interim while local businesses are adapting to contactless and digital payments.

The next time you leave the house, you might just want to make sure you have some spare cash on hand.