S'pore govt will review if there's need to mandate cash acceptance for physical merchants: Chee Hong Tat

The government will review if there is a need to mandate cash payments at physical merchants in Singapore, said Minister for National Development Chee Hong Tat.

He was responding to a question by Workers' Party MP Louis Chua at the Feb. 26 Committee of Supply debates, on the need for cash payment options in Singapore.

Decreasing cash acceptance

Chua said that the "proliferation" of digital payment options, such as PayNow and PayWave, has led to some merchants abandoning cash payments altogether.

This disadvantages certain communities, such as seniors or persons with disabilities who struggle to adopt digital technologies, Chua said.

"Furthermore, some children can only use cash as parents may deem them too young to own a bank card or smartphone. Some adults may also prefer cash to safeguard themselves against scams," Chua said.

He further observed that accepting cash payments is good for business resilience, should disruptions to digital payment services occur.

"Therefore, I hope the government will mandate [that] physical merchants accept cash in payments, in line with other economies such as China and Norway, or at least start with a pilot in the 16 residential neighbourhoods."

He noted that even China, one of the most cashless societies in the world, has recently strengthened regulations to ensure that physical stalls that provide face-to-face services also support cash payments.

Currently, as per the Currency Act, Singapore businesses have the flexibility to determine the accepted payment methods.

Cash-lite, not cashless

In response, Chee acknowledged that a small number of merchants in Singapore, who mainly target younger audiences, may decide to accept only digital payments.

This is a commercial decision, he said.

"Most merchants, based on our observations... continue to accept cash, because there is demand from their customers to pay in cash. They do not want to lose customers by refusing to accept cash."

That said, Singapore's goal is to build a "cash-lite", not a "cashless" society. Cash should therefore remain an accessible mode of payment in Singapore, he said.

"MAS is monitoring the trends and developments in this area, and will carefully assess if and when intervention is needed," he said.

"This includes the possibility of making cash acceptance mandatory by law."

At the same time, it is important to consider the impact on small businesses, he added.

This is because such a regulation may impose additional handling costs on them.

Top image from MDDI/YouTube