Nearly a quarter of SMEs still prefer cash and cheques: survey

Firms worry that the shift to cashless payments will be fraught with cyberthreats.

Almost a quarter (24%) of Singapore’s SMEs have expressed a preference for ‘old-world’ payment methods such as cheques and cash in a blow to the government’s dedicated cashless push, according to the latest survey by QBE Insurance’s on Singapore’s SMEs.

The survey revealed that only 26% of SMEs are actively using the peer-to-peer payment platform, PayNow Corporate, to receive and make payments even as 71% have admitted to knowledge of the service. Close to 10% of all SMEs are unwilling to use the service at all whilst nearly a third (29%) remain unsure of whether they will try out the system in the future.

“Government support for digitalisation was also raised in the findings, highlighting a disconnect between awareness and uptake,” QBE highlighted. “Whilst 65% of SMEs indicated that they are aware of the various forms of government support available to help businesses digitalise, only 30% have gone on to utilise the support. This is despite the realisation by many businesses that they lack the digital skills needed to move forward.”

Singapore is aiming to be cheque-free by 2025 as it aims to foster the adoption of e-payments in line with its Smart Nation campaign. One such policy effort is through the PayNow Corporate which officially launched on August 2018 to allow businesses to transfer funds using only their mobile number of NRIC

Also read: Singapore to be cheque-free by 2025

Fears that the platform is ‘unsecure and vulnerable to fraud and hacking’ was the top reason for cited by SMEs’ in their reluctance to adopt the platform. Amidst 90% of the SMEs surveyed raising concerns around security, fraud and cyber hacks, one quarter of them do not have any internal processes or policies in place to protect them from such risks.

The SMEs polled cited the high cost of investment in such technology as the main reason for why they did not digitalise or make more use of digital technologies and processes. Other key reasons included a lack of digital skills within their businesses and a lack of financing and funds, the report observed.

“SMEs form 99% of Singapore’s businesses, and it is important they continue to align to the overall economic direction for Singapore set by the government,” QBE Insurance Singapore’s CEO Karl Hamann said in a statement. “Whilst many are still showing hesitance towards digitalisation, they should tap on resources available to help smoothen their transition to the digital economy.” 

QBE Insurance's survey polls close to 500 of Singapore SMEs on their sentiment towards key business issues, the economy, and the state of their own businesses.