Over the last two years, digital payment solutions have taken the world by storm. McKinsey notes a decrease in cash payments from 2010 to 2020 in emerging and mature markets across the globe. Singapore is one of those places that has adopted digital payment technology in a big way. However, in the past, when people gave each other monetary gifts, they did so in cash. This year, the Monetary Authority of Singapore (MAS) is urging consumers to share their financial Christmas gifts in digital payment vouchers.
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A Traditional Singaporean Gift
In the West, we’re very aware of how much thought goes into a Christmas gift. We’d likely spend a long time agonizing over a gift at Tradition Company before finally shelling out money to buy it for a loved one. Singapore’s residents are more practical, seeing money as a valid way to show that they care. It’s a common thing to hand over cash as a Lunar New Year gift in the far east, and Singapore follows other larger Asian neighbors such as China in doing so. The downside of using cash in this way is that it tends to be bulky in larger amounts. Additionally, this year’s problems with the pandemic started to see cash getting used a lot less. The result is that people are relying on digital payments for purchases instead.
A Convenient Way to Deposit Money
With such a large portion of the populace already using digital payment methods, giving a gift through an app is likely to be more convenient for the average Singaporean. It’s convenient and avoids forcing you to go to a bank and line up for hours. Additionally, since there’s no printing involved, there’s a lower environmental impact on both emissions and carbon usage. Regulators asked fintech companies to aid by developing specialized apps for gift-giving on the night of the Lunar New Year.
Singapore’s also pushing the envelope when it comes to financial institution integration. The government recently announced that soon non-bank financial institutions would have access to the country’s retail platforms, giving users the freedom to choose who they bank their money with. The integration required the development of a new advanced programming interface (API), which conformed to the standards that both the Singapore Clearing House Association (SCHA) and the Association of Banks in Singapore (ABS) agreed to. The API was designed to work alongside existing banking and non-financial institutions’ technology.
Expected Growth in the Industry
ZDNet mentions that Singapore has already set up research institutions to boost their fintech capabilities. With so much money and time invested in fintech, the country is set to become one of the powerhouses when it comes to financial processing. Already, there’s a move for Singaporeans to embrace a cashless society, with all payments being made through mobile or digital payment methods. It may be a while before this sort of mentality takes root anywhere else globally, but Singapore is setting an excellent example for other countries to follow.