Cheque will no longer be in use by 2025 while cash withdrawals from automatic telling machines will come down significantly, Education Minister Ong Ye Kung who is a board member of the Monetary Authority of Singapore, said in a speech Wednesday at the annual dinner of the Association of Banks in the city-state. The platform, named PayNow, will be available for companies from Aug. 13.
Singapore has embraced technology to reduce cash usage and promote a digital economy. Today, there are more than 1.4 million PayNow registrations, and nearly $900 million has been transferred via PayNow since its launch last year, Ong said. Both local and international firms including DBS Group Holding Ltd. and Grab Inc. are also vying to offer digital payment options to residents and tourists in Singapore.
“The aim is not to force a cashless society, but to enable everyone to enjoy the convenience and efficiency of e-payments – simple, swift, safe and seamless,” Ong said. “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.”
Both cheque usage and ATM withdrawals have been declining, Ong said. The share of cheques as a proportion of all payments using some other forms of electronic payments known as FAST and GIRO and cheques was about 28% in 2017, down from 37% in 2015. That may come down to 15% in 2020, according to Ong.
“Sweden has done it. We can too,” Ong said, referring to becoming a cheque-free society.
Corporate clients of seven banks will be able to transfer funds via PayNow in Singapore. They are DBS, Oversea-Chinese Banking Corp., United Overseas Bank Ltd., Standard Chartered Plc, HSBC Holdings Plc, Malayan Banking Bhd, and Citigroup Inc, according to the association.
Ong also said while Singapore is encouraging competition among digital payment service-providers to give consumers choices, it will also ensure the various systems can inter-operate under a plan called SG QR, which is being implemented later this year.
In China, Ant Financial and Tencent Holdings have vast online payments businesses as they control 92% of the market.
“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,” Ong said. “That is the key principle in our approach to e-payment.”