Cashless Can’t Substitute for the Resilience and Security of Cash

Singapore is among Asia-Pacific’s highest cashless users, with cash making up around 19 percent of transaction value, but following a year of major bank outages that saw people breaking open their piggy banks or simply going without, citizens have been reminded that resilience is an irreplaceable benefit of physical currency.

Writing for The Business Times, Raphael Lim notes that pro-cashless campaigns date back as far as the early 1980s in Singapore, and ‘on the face of it, the dream of a cashless society appears to be close to reality.’ However, the October 2023 crash of Citibank and DBS digital services prompted the Monetary Authority of Singapore to impose restrictions on DBS, given it was fifth such downtime in the space of just eight months. Lim adds that ‘while digital channels certainly bring benefits, the growing reliance on such systems mean that the impact of any outage is far-reaching’.

Lim cites figures from the 2023 FIS Global Payments Report comparing Asia-Pacific’s highest cash users—Thailand, Japan and Vietnam, with cash at 56 percent, 51 percent and 47 percent of transaction value respectively—with Singapore, where cash makes up around 19 percent of transaction value. Ahead of cash are credit cards (36 percent) and debit cards (21 percent), but these depend on electricity, internet connectivity and financial institutions, all of which are likely to experience downtime that renders plastic and digital wallets alike unusable.

Lim also mentions the rise of cyberattacks, which can cause outages and result in sensitive data being compromised, directly impacting individuals as well as the finance industry. He points out ‘the Monetary Authority of Singapore has said the public could benefit from carrying some cash as a contingency’, a sentiment echoed by business and financial advisory consultancy Deloitte.

As well as allowing transactions to occur when networks are down, cash encourages competition within the payments landscape, and empowers everyone with choice. While its business is cashless, Singapore’s Network for Electronic Transfers (NETS) also acknowledges the importance of letting businesses and individuals choose the payment method that suits them in a given situation.