Singapore is launching a payments platform in an attempt to reduce the use of cash and checks as the country moves towards a digital economy.
Checks will no longer be used in the country by 2025, while ATM cash withdrawals will fall significantly, Education Minister Ong Ye Kung, a member of the Monetary Authority of Singapore board, said in a speech this week at the annual Association of Banks dinner, according to Bloomberg.
To make the transition to a digital economy easier, PayNow will become available for companies starting August 13.
There are currently more than 1.4 million PayNow registrations, and almost $900 million has been transferred via PayNow since its launch last year. Both local and international firms including DBS Group Holding and Grab are now offering digital payment options to residents and tourists in the region.
“The aim is not to force a cashless society, but to enable everyone to enjoy the convenience and efficiency of e-payments — simple, swift, safe and seamless,” explained Ong. “When the level of convenience and confidence crosses a critical tipping point, adoption will rise across our population within a short time and become pervasive.”
Both check usage and ATM withdrawals are already on the decline in the country, Ong revealed. The use of checks as a form of payment was at about 28 percent in 2017, down from 37 percent in 2015. And Org believe that may come down to 15 percent in 2020.
“Sweden has done it. We can too,” Ong said. Sweden is swiftly moving towards becoming a completely cashless society, with four out of five purchases in the country made electronically as far back as 2014.
In Singapore, corporate clients of seven banks will soon be able to transfer funds via PayNow, including DBS, Oversea-Chinese Banking, United Overseas Bank, Standard Chartered, HSBC Holdings, Malayan Banking, and Citigroup.
Ong pointed out that although Singapore is encouraging competition among digital payment service providers, it will also take steps to make sure the systems can operate together under a plan called SG QR, which is being implemented later this year.