When tradition meets technology: Cashless ang bao and digital goldBy Shaun Djie
When Chinese New Year arrives each year, millions of red packets exchange hands as part of a centuries-old tradition that has gradually evolved to suit the times. From heavy gold coins threaded with red to lightweight paper notes stuffed in envelopes, the conventional ang bao has now been digitised into a virtual gift that can be sent to anyone anywhere over the internet.
A digital twist to old traditions
Since being introduced to Singapore in 2015, virtual red packets have seen an increase in popularity over time, as more financial institutions and mobile wallets have developed their own services for sending and receiving e-ang bao. 2019 was the biggest year yet for gifting virtual red packets in Singapore with over two million GrabPay Angbao sent during the Chinese New Year (CNY) period—a 25% increase from the previous year. Standard Chartered Singapore saw their PayNow transactions increase fourfold from their numbers in 2018, and OCBC Bank observed twice as many electronic transactions through their app during the festive period in 2019 compared to the same period in 2018.
Whilst beautifully-designed and memorable ang bao packets have often been part of business strategies for CNY, some 5 million fewer red packets were printed this year compared to previous years. OCBC printed 15% fewer ang bao for the Year of the Rat, and for DBS it was closer to 20%. Instead, these banks and other payment providers have chosen to focus on pushing e-ang bao services to customers, offering cash giveaways and lucky draws as further incentives to go digital.
Taking the old with the new
As a highly-connected digital innovation hub, it is not altogether surprising that Singapore is adopting virtual gifting as an update to longstanding cultural traditions. The consulting firm McKinsey found that 77% of Singaporeans are already using mobile wallets in their day-to-day transactions, so it is understandable that handling physical cash for red packets may seem outdated to modern consumers. Even other customary gifts such as gold can now be purchased and managed online—an overall simpler process for mainstream consumers who no longer have to worry about custodianship and safety of their purchased gold.
Instead of spending hours in line for new notes to put in ang bao or shopping around to find the best quality gold, Singaporeans are becoming digital gifters—easily sending their well-wishes, money, and gold to friends and family, even if the recipients live in other parts of the world, via their smartphones. In the past, people would have had to pay gold vaults to store and insure the gold they received from their family members, but now, digital gold can be purchased and managed online through your laptop with storage, insurance and security settled automatically.
Whilst virtual gifting is on the rise in Singapore, e-ang bao and virtual gift transactions amount to a mere fraction of the 100 million paper notes that the Monetary Authority of Singapore (MAS) prints each year to supply crisp, new notes for the many physical red packets. Virtual gifting is still in its nascency in Singapore, but consumers seem to be open-minded about its progress. As long as digital disruption continues to shape the way modern society connects and communicates, e-ang bao and digital gold will be just one of many age-old traditions to receive a technological update in the years to come.