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Overcome Barriers To Make Cashless Payments a Norm

The Food and Beverage (F&B) sector is a major stakeholder in the service industry with immense influence to make cashless payments a norm in Singapore.

However, a survey conducted by an SUSS’ student project on the utilisation of digital payments by local hawkers in September 2018 paints a sobering picture – cash is still the preferred payment mode among consumers.

One of the reasons for this slow take-up rate for mobile payments points to the lack of acceptance by hawkers. This study, which polled over 236 hawkers across various hawker centres in Singapore, discovered that only 39.8% of them accepted mobile payments, while the remaining 60.2% had yet to accept them.

Among those who accepted mobile payments, only 19.6% of them had been using mobile payments for more than one year while 48.9% had been using it between six months and one year. The rest had just used it for less than six months.

There are several key issues preventing the uptake in cashless payments among hawkers and consumers. Taking steps to remove these hurdles will foster a positive environment for cashless payment methods to flourish.

Lowering adoption barriers, unleashing change

Hawkers, in general, tend to be senior citizens and are relatively less educated and tech-savvy. Morever, they usually prefer cash at hand because it is the payment method of choice among most of their suppliers.

Such factors fuel hawkers’ lack of adoption for mobile payment methods, but those are not the only reasons. Generally, four barriers to adoption exist both for hawkers and customers:

  • Cost Barriers

What is it? The additional costs incurred for adopting mobile payment services, including the cost of getting a smartphone and the incurrence of transaction fees are outlays that some hawkers cannot afford.

How to solve? When hawkers sign up with cashless payment platforms, such as GrabPay, the provider would help to publicise their services within the app and help drive customers. This additional demand-driven profit could help hawkers offset the cost of adoption.

  • Tradition Barriers


What is it? It will take time for consumers and stall owners alike to adjust their preferred cash-only transaction practices to suit cashless methods.

How to solve? Cashless payment service providers must continue to engage stall owners to help them see the value of going cashless. This can include showing how seamless transactions can be made through the app. For instance, not having to calculate and sort through coins and notes as change can be a breeze during peak hours. For consumers, offering unique rewards and promotions to them, available only through the app, can be a good way to encourage more to make the switch.


  • Value Barriers

What is it? Consumers may be reluctant to change their preferred mode of payment as they do not see much or added value in doing so.

How to solve? Much like overcoming tradition barriers, cash rebates and rewards will give consumers a greater impetus to make the switch. Cashless service providers can also publicise how easy it is for customers to use mobile payment methods - they no longer need to worry about leaving their home without their wallets.

  • Usage Barriers

What is it? Hawkers may show resistance towards the use of mobile payments due to factors such as inconvenience and slow processing speeds of mobile payments. Their unfamiliarity with such new forms of technology can also result in their fear of making transaction mistakes.

How to solve? Mobile-payment solution providers do work closely with hawkers and merchants at the onset when they choose to adopt this new form of technology. They also offer tools to help merchant troubleshoot any potential transaction issues. These can help to simplify the process of usage.

Cashless payment is inevitable

Even though cashless payments may seem to be one aspect of Singapore’s Smart Nation vision, it is no less essential to securing the success of this initiative. On the global front, cashless payments are also fast becoming a norm, so this evolution in payment methods must be accepted inevitably.

We must also continue to build on the sustained effort to drive the adoption of mobile payments by service providers and consumers alike, to ensure Singapore cements its position in this arena.

This article has been adapted from an earlier commentary: "Hawkers want to embrace cashless payments but say they need help tackling barriers" by Associate Professor Huong Ha, Head of the Business Programme, School of Business, Singapore University of Social Sciences (SUSS); and Carey Lin, an SUSS Business undergraduate.


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