2 in 3 SMEs say that they will go cashless by 2023
Good news for Singapore’s e-payments movement. The nation is likely to hit its targets – perhaps even ahead of schedule – according to a poll of 200 small and medium enterprises (SMEs) conducted by OCBC Bank, two weeks before the launch of PayNow on 13 August 2018 for businesses.
The survey was conducted against the backdrop of overwhelming response received from businesses enquiring about PayNow: 9 in 10 new to OCBC Bank customers pre-registered for the service since April 2018.
Affirming this upward trend in the take-up of e-payments, 2 in 3 of the businesses surveyed said that they are likely to go cashless – including doing away with the use of cheques – by 2023. Particularly, more than 45% of the respondents anticipated going cashless by as early as 2020.
Today, businesses largely use cash and cheques when dealing with their customers and suppliers. But times are changing.
The Minister for Education and MAS’ board member Mr Ong Ye Kung said at the Association of Banks in Singapore’s 45th annual dinner that the share of cheques, as a proportion of all payments using the FAST (Fast and Secure Transfers) interbank transfer service, GIRO and cheques, was about 28% last year, down from 37% in 2015.
Mr Ong added that Singapore should aim to have ATM cash withdrawals at 20% of the transaction value of e-payments by 2020, and that Singapore should be cheque-free by 2025.
The impending launch of PayNow for businesses is integral to meeting these goals and interest has been strong.
Based on the poll, the top three reasons for signing up were:
1. Convenience compared to handling cash and cheques which require trips to the bank;
2. Ease of making payments without having to know the payees’ bank account number; and
3. Instantaneous deposits in the business’ bank account(s) would improve cash flow.
Even among those who had not signed up, more than 40% said that they were interested in the service but were just taking a wait-and-see approach, and more than a quarter said that they feel PayNow would be useful or very useful to their businesses.
Said Mr Melvyn Low, Head of Global Transaction Banking, OCBC Bank: "Singapore’s e-payments journey so far has been focused on the consumer - providing them with the tools to make e-payments and educating them about the benefits. But for e-payments to become pervasive, the next big step has to come from businesses.
"From the sustained, strong response to PayNow from our customers, we are confident that there will be a significant reduction in cash and cheque use. As banker to 1 in 2 SMEs in Singapore, we have a responsibility to make sure that our customers understand how PayNow, and e-payments as a whole, can benefit their business. We have been working with customers on this and will continue our efforts on this front."
OCBC’s PayNow collaborations with government agencies
OCBC Bank has worked with government organisations to implement PayNow.
For instance, CPF Board became the first government agency to adopt PayNow by leveraging OCBC Bank’s Application Programming Interface (API).
Since eligible CPF members aged 55 and above have the option of withdrawing their CPF savings via PayNow, take-up has been strong. By 30 June 2018 – just over three months after the option became available on 26 March – some 4,000 withdrawals, totalling over $40 million, have been made through this payment method.