Prime Minister Lee Hsien Loong is right to push for a cashless society in Singapore as a top national priority.
I remember one coffee meeting with an official from the Info-communications Media Development Authority of Singapore (IMDA) earlier this year. We were discussing what would be the best approach to turning Singapore into a cashless society.
I was sharing my opinions on why Singapore is in good position to make that happen. There’s a few key reasons.
First, Singapore has great infrastructure already. NETS, ERP, EZ-Link and adoption in online/mobile banking is high. Second, consumers in Singapore are early adopters of new technology. Look at how fast Uber and Grab became the norm for commuters in Singapore. Finally, government support under the Smart Nation scheme encourages innovative new technologies and projects to break into the market.
My only question during our discussion was how long it would take for Singapore to go cashless, and how to support the process to make it happen faster.
The IMDA official gave me a very inspiring answer, but it came in the form of a question. “Despites all the issues,” he said. “I think this is the most important question to consider: Who has the most chance to be the first cashless country in Southeast Asia?” That changed my mind on how to deal with the challenges faced in going cashless.
Yes. Instinctively, without thinking much, my answer was Singapore. I have been asking this question to many industry players over the last few months. So far, all of them have given me the same answer: Singapore.
Nonetheless, it will be important to study other near-cashless economies like South Korea and China. Singapore doesn’t need to make the same mistakes they did and can deliver something even better.
I don’t remember when was the last time I used cash in South Korea (whilst I am Korean, I have been living in Singapore for last 11 years). Even the coffee shop offers mobile payment options over credit card when I travel to China. But there are still lots of problems that need to be solved in South Korea and China.
Even though South Korea is now close to a full cashless society, it still relies heavily on credit card and online payments. The transition to mobile payments in South Korea is not happening as fast as some might have expected. This is why I say Singapore can take the initiative to go mobile and adopt next-gen payments directly.
In China, I have problems paying for things because I don’t have a WeChat payment account. I don’t have local accounts to plug into the WeChat properly, yet many local shops in China don’t accept credit cards! Singapore can build a system that works smoothly with all the international payment systems and providers, whilst also supporting mobile.
As a global fintech hub, Singapore need not waste time trying to improve existing systems and solve old problems. Instead, Singapore should adopt bleeding-edge payment technologies from fintech companies whilst continuing to work closely with international and local banks.
At the end of August PM Lee took to Twitter to share his position on the the need for one single e-payment system across Singapore: "In Singapore we do have e-payments, but too many schemes & systems - inconvenient for consumers and costly for businesses."
In response, Tan Min-Liang, the Singaporean entrepreneur who founded Razer, a successful gaming tech company, tweeted back that he could get such a system "rolled out nationwide in 18 months". The PM, in his characteristically pragmatic style, said simply: "Make me a proposal, and I will study it seriously."
I adamantly believe Singapore has enough talent and infrastructure to deliver on a cashless society by working closely with young, smart, and passionate entrepreneurs like Mr. Tan, as well as all the best financial institutions in our city-state.
I’m looking forward to seeing the rapid and smart transition of Singapore into the best role model of a cashless Smart Nation to all our neighbouring countries. Beyond that, I hope it can become a global case study. And I’m confident that Singapore will make it happen.
It’s an exciting time to be working on fintech technologies as a partner to all the ecosystem stakeholders.
The views expressed in this column are the author's own and do not necessarily reflect this publication's view, and this article is not edited by Singapore Business Review. The author was not remunerated for this article.
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Mr Joe Seunghyun Cho is the CEO at LATTICE80 & Co-founder and Chairman of Marvelstone Group. LATTICE80 is the World's Largest Fintech Hub located in Singapore and Marvelstone Group is a private investment group that develops and invests in growing businesses. With finance as its core strength, it also makes diversified investments in technology, real estate, infrastructure, energy and media. Headquartered in Singapore, the Marvelstone Group believes in the growth of Asia and seeks to be a cornerstone investor to bring forth positive development and social impact to local communities.
Mr Cho also sits on the committee for Singapore FinTech Association, a cross-industry non-profit platform to facilitate and support collaboration between all FinTech ecosystem participants and stakeholders. The Association plans to become an effective platform for members to engage with multiple stakeholders to find solutions to issues.
In his long investment career, Mr Cho has held various leadership positions from CEO of Yozma Ventures (including Managing Partner / Head of Private Equity of Yozma Group Asia) based out of Korea, to co-founding a hedge fund and asset management company.