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Saturday, 26 August 2017

Towards cashless society, how about a unified digital wallet

On the latest coverage on going cashless:

  1. Can Singapore catch up in race to go cashless?
  2. Govt agencies explore e-payment solutions for hawker centres, coffee shops

The success or failure of the drive hinges not on what Singapore want to achieve but how consumers (end users) wants. Just like for start-ups to succeed, it is not about how wonderful a product or service the company can offer, but how well it addresses the unresolved need of the consumer.

For cashless to take off, one crucial aspect is user experience which boils down to convenience. A typical user now must grapple with cash to make small value purchase in hawker centres, wet market or small groceries stores. He also uses cash to top up store value cards such as Kopitiam card for food court usage. With proper planning, he might juggle a portfolio of credit cards that no only suit his spending habits but also maximises his rebates (cashback, air miles or vouchers). Through his active life, he might also accumulate many membership cards, discount cards and so forth. He might do well to drive a car and so pick up a driver licence along the way. With kids, he might have more loyalty cards for family oriented programmes.

Taken together, going cashless and making cash payment easier only solves part of the problem and not enough to convince end users to switch. To make matters worse, as highlighted in the various articles, the need to maintain so many payment system for businesses add to the inertia for any transition.
Looking at the issue holistically, we need not only a common, low cost payment system that benefit businesses but also a common digital wallet for end users. Such unified digital wallet allows payment, whether from credit or cash accounts, and digitalised other cards such as identification, driver licence and discount cards. The back-end of this digital wallet can either be a government or third party maintained central data depository. The front-end will be an app that a user can download to their mobile phones. Payments and authentication (identity, membership, or discounts) will be done via QR code scanning (camera enabled phones are ubiquitous but not NFC ones). This way, the wallet that one carries can literally be replaced by a mobile phone completely.

Unfortunately, the downside to all these digitalisation is the challenge to help those less able to handle the cashless platforms such as the non-English literate elderly, the blind or vision impaired. For them, traditional payments and identification must still be available and not totally done away with.



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