Is cash still king in ASEAN?

Card penetration for some countries fall below 50%, according to a study.

Cash still reigns supreme in ASEAN as 70% of transactions in Indonesia and the Philippines are still done through cold, hard cash, according to a report by Standard Chartered.

The report noted that whilst the penetration of bank accounts has shown improving numbers in some countries, card penetration is relatively low at below 50%. In most of the ASEAN countries, the preferred way to pay for online purchases is cash on delivery.

According to Stanchart’s report, reasons for high cash usage in the region in spite of the awareness of options for digital payments include the lack of understanding of how digital payments work, privacy concerns for their financial records, the perception that cash is still the simplest payment, and merchants, especially SMEs, that are still reluctant to absorb the costs of e-payments methods.

Also read: Cash is still king in Singapore as reluctant elders shun mobile apps

Aside from cash, cheques are also a go-to for transactions in most ASEAN countries, with usage remaining relatively stable in the Philippines and Thailand in the past five years. On the other hand, Indonesia’s cheque usage fell 32%.

StanChart noted that governments in Singapore and Malaysia have boosted efforts to reduce cheque usage in their effort to move towards a digital economy. For its part, Singapore aims to lower the use of cheques to 15% in 2020 and be cheque-free by 2025. Meanwhile, Malaysia targets to reduce its cheque volume to 100 million per year by 2020, which is half the usage in 2012.

“Markets like Indonesia are also trying to move away from cheque issuances. Bank Indonesia unveiled a direct debit feature in their national clearing system in 2016, and is in discussions to launch additional payment options to provide digital alternatives to cheque/bilyet giro,” the firm noted.

Join Singapore Business Review community
Since you're here...

...there are many ways you can work with us to advertise your company and connect to your customers. Our team can help you dight and create an advertising campaign, in print and digital, on this website and in print magazine.

We can also organize a real life or digital event for you and find thought leader speakers as well as industry leaders, who could be your potential partners, to join the event. We also run some awards programmes which give you an opportunity to be recognized for your achievements during the year and you can join this as a participant or a sponsor.

Let us help you drive your business forward with a good partnership!

Thanks to the renewal of interest in the Singapore market.
The electronics cluster showed the most optimism.
The initiative aims to improve the overseas service exports environment.
This is the group’s 2nd sustainability notes issuance in the SGD bond market.
A Jefferies report said Singapore banks have enough buffers.
HongkongLand, CapitaLandInvest, and ComfortDelGro showed the most growth.
Mizuho Securities Asia Limited will be the notes dealer.
The company’s first batch has been fully allocated in the country.
The total consideration of up to $539m over three years will take effect. 
This is to address the increased global demand for healthcare products.
Thanks to the company's improved distribution channels.
Hiring activities online increased by 55.7% in August.
CapitaLandInvest, Capland IntCom T, and Sembcorp Industries showed the most growth.
This low turnout is due to the large quantum of the project, experts say.