Cash transactions also incur significant costs, says Janil Puthucheary

SINGAPORE: The cost of transaction is indeed a stumbling block in getting people to adopt cashless payments, but Dr Janil Puthucheary, the Minister-in-charge of the Government Technology Agency of Singapore (GovTech), has pointed out that cash transactions do also incur significant costs.

“When you go to the ATM, someone had to stock that ATM, manage the cash and maintain the ATM,” he said. “And then when you take it from the ATM to the cashier, after the cashier puts it in the machine, later on it also has to be hauled back to the bank and recycled,” Dr Puthucheary said during 938NOW’s Talkback programme on Friday (Mar 2).

“So there’s a cost associated with processing cash. Someone pays that cost.”

He agreed there would be a need to look at the “various relationships between the cost of transactions”. E-payments had been identified last year as one of the five strategic national projects to drive Singapore’s Smart Nation ambitions. 

“Today, our focus is not necessarily on the cost of cash,” he said. “We’re really more concerned about the cost of processing a cheque, which is much more expensive to process compared to cash. We’ll deal with that frontier first, and we’ll let the e-payments landscape evolve.”

Dr Puthucheary, who is also Senior Minister of State for Communications and Information, said the Government is also concerned that there may be people – such as those who are bankrupt or those without bank accounts – who are inadvertently left out of the e-payments landscape.

“We are concerned. We’ve got a team that’s working on this that I chair at the MCI,” he said. “It’s called the Digital Readiness Workgroup, and it involves people from not just the Government, but also people from the private sector and also the people sector.”

“We do have to look and see who are the people who are either naturally excluded or feel that they want to be excluded from this process,” he added. “Now, if you want to be excluded, it’s your own choice. That’s fine. But, if we get to the point where essential services are delivered this way, then we need to think about how to bring everybody on board, and make it possible to access essential services.”

“So, by the middle of the year, we’ll have a strategy out.”

Dr Puthucheary stressed that going cashless has to be something that is easier and better for consumers, but he said the private sector is very supportive because cashless payments will help to drive down their business costs.