SINGAPORE (Aug 29): New research conducted by online payments company PayPal has revealed that while cash remains king for transactions in Singapore, going digital may be the way to get locals to pay their bills.  

Entitled Digital Payments: Thinking Beyond Transactions, the study surveyed 500 consumers and 200 merchants in Singapore, out of which only 23% of consumers who used digital payments reported to have experienced difficulty with bill payments compared to 43% of consumers who used cash.

Cash is still the preferred mode of payment in Singapore, with 90% of survey respondents using it for transactions with 43% citing it as the most often used payment option. 

However, digital is generally perceived as a more convenient mode of payment (69%) and one that comes with more incentives (38%) than with traditional payment methods such as credit cards and bank transfers.

Businesses, too, see the benefit in digital payments with 35% saying they are able to reach a wider audience compared to traditional methods.   

85% of respondents are taking to selling via social media, where digital payments are a key transaction method. On the other hand, 88% mentioned that social selling has allowed them to reach customers outside of Singapore, while 84% believe social selling has helped them to grow their business.

“The conversation is evolving not just financial inclusion – giving people access to the bank – people are really talking about financial health,” says Rohan Mahadevan, senior vice president, PayPal Asia Pacific.

“Using digital forms of payment really help people organise their life better when it comes to financial obligation,” he adds.

According to Mahadevan, digital payments can also help businesses to withstand financial shocks with a diversified customer base.

“It has to do a little bit with the savings; you can have changes in the economy such as weather that makes it local challenges. But now when you are actually digital and have access to the world with a more diverse set of customers, the shops see less local challenges,” he explains.

“We are already taking great strides in making digital payments part of our daily lives – but as rightly pointed out by Prime Minister Lee Hsien Loong in his 2017 National Day Rally Speech, we still have some ways to go. Our report also shows that Singapore is lagging behind cities like China (86%) in the adoption of digital payments,” adds Rahul Shinghal, general manager, PayPal Southeast Asia.