Grab a credit card that gives you better rewards & more!

    Benefits Of Going Cashless

    It’s difficult to remember a time when people actually went to their bank every month and withdrew a large amount needed for the whole month’s expenses. We all use debit, credit or prepaid cards now for almost all monetary transactions. If your parents and grandparents scoff at your faces for all the credit cards you carry in your wallet, you need to explain to them why cashless transactions are both cool and safe. Or simply refer them to this article!

    Why Go Cashless?

    A cashless society is not just about everyone carrying cards in their wallets instead of the red-blue-green dollar notes. It’s not just about making transactions convenient for everyone. It’s also an economic move, a lot of savings for the government, and helps in standardising money use across national borders. Let’s look at the various benefits of going cashless in detail:

    1. Reduced crime rate: If you don’t keep cash in hand, and don’t carry around large sums to deposit in banks or withdrawn from banks and ATMs, thieves and robbers are going to have a tough time laying their hands on you, right? Not having to lug around cash in wallets and suitcases is good for businesses and institutions too. According to research by Tufts University Senior Associate Dean Bhaskar Chakravorti, retailers across the world lose around US$40 billion in a year – around 1% of the total revenue – in cash thefts. Of course, cards can be stolen too, but without the accompanying PIN, they are of no use. However, card frauds are increasing and the government is putting measures towards cyber security and spreading cybercrime awareness to control this issue.
    2. Saves time and resources: At an individual level, it is convenient and time-saving to use a card instead of cash. You don’t need to visit the bank every 2 weeks to withdraw money or send money to your family in another city or country, and you don’t need to wait for change at stores. At a company level, it also saves time and resource in the management of petty cash, counting, depositing in banks, and other cash-related activities. Even governments can save money on these activities if less cash transactions are made. For example, Ireland says it spends around S$940 million – 1.4% of the country’s Gross National Product – on production, administration and security for cash and cheques.
    3. Traceable and trackable: Card transactions can be tracked and their data – not your personal data but the general spending data – can be collated and put to good use by both governments and businesses. Tax base can be enhanced with enhanced tracking of transactions in the economy. Governments can analyse the spending patterns and monetary requirements of card users to come up with out-of-the-box economic policy decisions. Patterns of commercial activity can be predicted and better planning in terms of housing, transportation and energy management can be made. For example, if online shopping is seen to be higher than offline shopping, the government can put in place an environment for e-commerce ventures to function better. Businesses can use the same data to boost their sales.
    4. Economic growth: Cards, especially credit cards, encourage higher spending. Alongside growing salaries, this is not really a point of concern but of opportunity. Savings in bank accounts will be more prone to spending and investment rather than hoarding. Higher spending means more manufacturing and production, which in turn boosts economic growth. Moody’s Analytics reported that consumption of around US$296 billion in the world between 2011 and 2015 was due to higher card usage, which contributed to a 0.1% rise in global Gross Domestic Product globally.

    Government Measures Towards Cashless Society

    The government will need to consider several measures in order to make Singapore a cashless society. Some of the important concerns are listed below:

    1. Cyber security measures: Both the government and businesses will have to work towards securing internet banking and payments from cybercrimes. Usually when websites of banks or government institutions are hacked, transactions come to a standstill and several thousands of business is impacted. The Public Service needs to create an environment in which cybercrimes are protected from and also easily detected and reversed, and businesses can continue their operations.
    2. Financial literacy and inclusion: To go completely cashless, every single person living on the island needs to have a bank account, internet connection and smartphone, at the very least. And every single person also needs to know everything about cashless transactions, virtual money and their vulnerability to fraud and cybercrime.
    3. FinTech Investment: The Monetary Authority of Singapore (MAS) has already promised to invest S$225 million over the next 5 years in the FinTech segment among start-ups, in order to boost digital payment systems. Merely cards are not enough for a society to go cashless. The entire concept of money may need to be changed, and we will have to get used to mere virtual existence of money.
    4. Policy changes in accepting payments: Online payments, payments using phone apps, use of pre-paid cards, use of ez-link cards for public transportation – these are some of the changes that both public and private entities need to incorporate into their system. The policy has to be changed to accommodate the ongoing changes in the financial system and the changes to come. Tax benefits may be considered for those using cards and apps instead of cash, to follow the proposal of the Indian government; high-value transactions could be made compulsorily cashless, and payment terminals could be made compulsory at every single merchant outlet in Singapore.

    While it may not be possible to go cashless in a short time, concentrated efforts towards the goal could help make Singapore among the first countries to get rid of paper money. Currently, Sweden, Denmark, Canada, Somaliland and Kenya are among the nations in the world that are on their way to becoming cashless society. Can Singapore beat them to it?

    This Page is BLOCKED as it is using Iframes.