Hawkers want to embrace cashless payments

SINGAPORE: Cash may be king in the past but if Singapore aims to be a leading digital economy, there is no running away from going cashless, whether we like it or not.

A digital economy — a key element in Singapore’s metamorphosis into a Smart Nation —  is impossible without the development of a first-class payment ecosystem that is efficient, secure and allows people to make seamless mobile transactions.

The Singapore Government has been encouraging the adoption of cashless modes of payment across various domains and industries, including the food and beverage (F&B) sector.

Many mobile payment platforms have also been introduced by different providers, such as NETsPay, GrabPay, LiquidPay, DBS PayLah!, PayNow, Google Pay, Pay and Samsung Pay.


However, despite the introduction of many initiatives to push the economy towards cashless transactions, usage rates remain persistently low compared to cash payments, especially in small business establishments, small F&B outlets and hawker centres.

READ: Beneath the digital friendly facade, Singaporeans still reluctant to accept cashless payment, a commentary

A 2016 KPMG study found that nine out of 10 consumers still prefer to pay in cash in wet markets and hawker centres in Singapore. About 90 per cent of transactions were transacted in cash in wet market and hawker centres.

In other F&B businesses, cash transactions were fewer, with fast-food outlets at about 55 per cent, and dine-in restaurants at less than 20 per cent.

These findings suggest that small business establishments and hawkers view mobile payments as a complementary payment method and not a substitute.

A survey conducted for a Singapore University of Social Sciences’ student project in September this year suggested that this preference for cash has remained unchanged, and more needs to be done to break down hurdles hawkers face.

Out of 236 hawkers polled across hawker centres in Singapore, only 39.8 per cent said they accepted mobile payments, while the remaining 142 had yet to accept mobile payments.

Among those who accepted mobile payments, only 19.6 per cent of them had been using mobile payment for more than one year; while 48.9 per cent had been using mobile payments between six months and one year. The rest said they had used it for less than six months.


Though the push towards cashless has been accelerated in recent months, including the appointment of NETS to unify the fragmented payments landscape and bring cashless to hawker centres, canteens and coffee shops, the SUSS student survey suggests that the state of mobile payments among hawkers is still in its infant stages.

This is not surprising since hawkers, in general, are senior citizens, relatively less educated and less technology savvy. And press reports have also noted that hawkers prefer to have cash in hand because most of their suppliers also demand cash.

These factors aside, hawkers’ lack of enthusiasm in adopting mobile payment can also be attributed to four barriers: Cost barriers, tradition barriers, usage barriers and value barriers.

Cost barriers refer to additional costs incurred in adopting mobile payment services, including the cost of getting a smartphone and the incurrence of transaction fees.

Tradition barriers occur when innovation uncomfortably changes users’ existing routines, while usage barriers refers to resistance towards the use of mobile payments due to factors such as inconvenience and the processing speed of mobile payments.

Value barriers refers to monetary value where consumers are reluctant to change the way they perform their task, unless the innovation offers a cheaper compared to its substitutes.

For hawkers, when the return on investment in mobile payments is still unclear, the initial investment also imposes a value barrier to their adoption.


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