Yahoo Finance Cashless Payments in Singapore – 7 Reasons Why Merchants Should Get Onboard
There’s been a lot of talk about how the government hopes to transform Singapore into a cashless society. And I can’t say I’m complaining, because every cent paid in cash robs you of the chance of collecting cashback, air miles or rewards points.
But the ones who are really going to benefit the most are businesses—that includes everyone from hawkers at your local food centre to your big, ubiquitous H&M.
You might already have used GrabPay, which Grab recently announced will soon go beyond transport to enable people to pay for other goods and services using GrabPay credits.
On other words, in a few months’ time, we’ll get to use GrabPay at F&B, retail and entertainment outlets.
That sounds promising, but the fact is that many merchants have yet to adopt the system, either due to inconvenience or cost.
Even as the number of payment methods grows—you can now pay by card, EZ-link, by beeping your NFC-enabled mobile phone, and very soon, QR code—there’s still a frustrating number of merchants that insist on cash or nets.
Here are some factors merchants will want to consider before writing off accepting cashless payments as too troublesome:
1. Faster transactions
Each time some customer stands at the counter rummaging in his wallet for cash and the cashier/stallholder has to look for change or work the cash register, precious time gets wasted.
If everyone is paying without cash, transaction time speeds up a whole lot. For a hawker trying to sell as many plates of economy rice as possible during lunch, the benefits are obvious.
For retail outlets, this means shorter queues, and being able to save on service costs and deploy staff in a more efficient manner.
2. A more pleasant customer experience
A lot has been said about how retail businesses are feeling the heat from online competition, since Singaporeans now prefer to sit at home and order something online than brave crowds and long queues to buy something in a brick and motor shop.
How many times have you wanted to buy something at the supermarket during lunchtime but got turned off by the sheer number of people standing in line?
If 100% cashless payments can speed up the purchasing process and reduce queuing time, this can only be a good thing for brick and mortar retail businesses and F&B outlets.
What’s more, as cashless payments tend to be less labour intensive, service staff can be deployed to actually make the customer experience more pleasant.
3. Security
There is a reason people rob banks. (Even Singapore recently had its very own bank robber!) Keeping large amounts of cash on the premises can pose a security risk.
For business owners, another security issue tends to be their own staff stealing cash. Human error also causes money to be lost at times, since staff aren’t robots and mistakes do get made.
Not having to have cash on-site solves both of these problems. As cashless payments are much easier to track, every transaction can be accounted for.
4. Not having to handle cash
Business owners will know that cash is very troublesome to handle.
Not only do you need to have a member of staff constantly stationed at spots where cash is being kept, the money also has to constantly be checked and counted at the start and end of the day, when cashiers change shifts and so on.
5. Easier to analyse sales data
As any SME’s in-house accountant will tell you, keeping track of a business’s revenue can be a very frustrating process. The more offline payment methods there are, the more admin work there is.
When everything is cashless, sales get captured much more easily, and analysing sales data on the go becomes much easier.
For instance, a hawker accepting only digital payments would be able to see what time customers are arriving and what they are ordering, which would in turn help him to plan what ingredients to buy more or less of and know which dishes are doing well.
6. Infrastructure looks likely to improve and become more accessible
There’s no point in harping on the benefits of cashless payment if businesses think it’s going to be expensive and inconvenient to implement.
As the government seems really serious in their push to promote cashlessness, it looks like at some point they will need to compromise by helping merchants to lower the cost of adopting cashless systems.
We don’t know what exactly they’re going to do, but the government has been famously quite generous when dangling carrots to encourage businesses to do their bidding (remember the PIC grant, or the current Work-Life Grant?).
7. New payment platforms could get more merchants on board
As consumers, Singaporeans are pretty used to patronising merchants that don’t accept contactless payments.
But now that a major upcoming payment platform like GrabPay is on the scene, more and more merchants are likely to come on board. This will have spillover effects for businesses.
As the digital system becomes more popular, retailers will be able to benefit from partnerships with banks and other businesses to offer rewards programmes or co-branded cards. The more common the cashless system becomes, the more incentives customers will have to use it thanks to the various benefits and rewards they could potentially receive.
When that happens, merchants who haven’t followed suit could find themselves missing out.
How do you think cashless payments will benefit Singapore businesses? Tell us in the comments!
The post Cashless Payments in Singapore - 7 Reasons Why Merchants Should Get Onboard appeared first on the MoneySmart blog.
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