Singapore, long considered among the most tech-savvy countries in the world, has reached a tipping point: Card use has overtaken cash as a payment vehicle there, according to the Visa Consumer Payment Attitudes Study.
The move away from cash is reflected in the penetration of contactless cards among consumers in Singapore. More than four in five consumers (82%) use the cards, which have become the payment preference across a broad swath of purchase categories. Visa reported that more than 95% of the transactions processed on its platform were contactless. That’s one of the highest rates in the world.
“Singapore’s tech-savvy consumers lead hyper-digital lives, and our nation’s advanced payments infrastructure has made it possible for many to go cashless,” said Adeline Kim, Visa’s Country Manager for Singapore and Brunei.
Singapore Prime Minister Lee Hsien Loong used his National Day Rally 2017 speech to lay out a vision for a cashless society, and initiatives in that direction soon followed, with e-payments proposals, QR codes, peer-to-peer (P2P) services, and others crowding in.
Why Singapore Stands Out
Now, Visa says, Singapore is the regional leader in both the usage of and preference for contactless cards, with 74% of consumers using them and 29% preferring them.
More findings in the Visa report:
- 60% of consumers in Singapore have succeeded in going cashless.
- On average, they go 10.5 days without using cash.
A Trend That Spans Borders
Although the move away from cash is particularly acute in Singapore, it is occurring in general terms across the globe. In the United States, for example, Javelin Strategy & Research shows that cash ranks third among consumers’ most used payment methods, well behind major credit cards and at about half the rate of debit or check cards.
What’s remarkable about the trend in Singapore is the degree to which that shift is reflected in the use of contactless cards and the way the government is pushing the initiatives.
Certainly, some of the movement away from cash was driven by the onset of the COVID-19 pandemic, which forced consumers into payment channels that didn’t involve contact with others. In Singapore, Visa said, the pandemic accelerated consumers’ expectations of becoming a cashless society by three years.
Elsewhere, Cash Has Its Place
In the broader view, beyond Singapore’s borders, cash remains a hardy vehicle for payments. According to Health of Payments, a Javelin report sponsored by NCR, cash remains the preferred method of paying others in the United States.
According to the report by Marco Salazar, the Director of Tech & Infrastructure at Javelin, the prevalence for cash in such payments at least doubles the preference for non-bank P2P services like PayPal and Venmo and the use of personal checks. A range of factors—convenience, security, lack of fees, spending control, and the preservation of privacy—came into play for consumers’ affinity for cash.
Two-thirds of U.S. consumers want cash as a fundamental option for payments, the report indicated. That’s in line with a general preference for a range of payment options, so consumers can pick the one best suited for them.