Since the push towards a cashless society began a few years ago, many electronic payment options have been developed and rolled out: PayNow, PayLah, payWave.
While it is now common to use contactless payment in retail shops, cash is still king in coffee shops, foodcourts, hawker centres and shops around housing estates.
These places probably account for the lion's share of daily transactions.
The Covid-19 pandemic has raised the urgency to go cashless. One cannot rule out the possibility that handling dollar notes and coins may facilitate the transmission of the coronavirus.
China disinfected and isolated used banknotes as part of its efforts to stop the spread of the coronavirus.
This is an opportunity for the Government and industry to get everyone on board the cashless wave.
In my view, the most feasible way is to get every merchant to put up a QR code such as the one for PayNow or SGQR. Instead of waiting for merchants to apply for and enable their PayNow or SGQR, banks could simply enable the system and go to every merchant to put up the QR code.
The key barrier to adoption is trust: Did payment go through accurately? Banks can make the process friendlier by providing better notifications.
For example, when a transfer is done, both consumer and merchant could receive an alert message. At the end of the day, merchants could get a summary of their daily takings. Such value-added services will further encourage merchants to transform.
Cashless payment systems benefit consumers, merchants and the banks. Banks must not rush to levy all kinds of fees at the start, but instead should invest in efforts to facilitate the transition and then develop value-added services which merchants and consumers are willing to pay for.