SINGAPORE - Singapore is not going cashless for taxes, said Minister-in-charge of the Smart Nation Initiative Vivian Balakrishnan in Parliament on Thursday (March 1).
"We are not going cashless for its own sake. Certainly not for tax collection," he said during the debate on the spending plans of the Prime Minister's Office. He added: "The ultimate objectives are to lower transaction costs for both businesses and citizens."
Dr Balakrishnan was replying to Mr Desmond Choo (Tampines GRC), who had asked whether e-payment projects could support the country's future economic transformation and the freelance economy.
He also gave an update on PayNow, an instant fund-transfer service that lets individuals transfer money by entering the recipient's mobile phone or identity card number in any bank's app.
To date, more than one million Singaporeans have linked either their mobile numbers or identity card numbers to their bank accounts via PayNow. More than $370 million has been sent through PayNow.
Dr Balakrishnan said public agencies will start using PayNow from this month, with the Central Provident Fund Board allowing CPF withdrawals for those above 55 years old to be done via PayNow. Funds will be received on the same day, compared with five working days previously.
From this month, Edusave Award winners from the Institute of Technical Education and polytechnics can also receive their award money via PayNow.
He noted that when companies are allowed to link their business registration numbers to their bank accounts by the middle of this year, PayNow's use will be more pervasive, going beyond transfers between friends.
With PayNow, merchants need not worry about complex system installation and related fees. As PayNow rides on Fast (Fast and Secure Transfers) - the country's instant interbank funds transfer system - merchants also need not worry about cash-flow issues. In comparison, credit card and ATM card direct debit transactions take up to two days to settle.
During the debate, Ms Tin Pei Ling (MacPherson) raised concerns about the challenges faced by hawkers to operate e-payment systems.
"Nets gave the point-of-sale system for free. There is no transaction fee. But hawkers are still not using because it is too troublesome," she said.
Dr Balakrishnan said the solution lies in a national quick response code payment standard, dubbed SGQR. It will work with most, if not all, the e-wallets in use.
Commenting on Nets and EZ-Link's recent tie-up to allow ez-link cards to be accepted on Nets payment terminals at hawker centres, he said: "Frankly, this is long overdue."