With dwindling use and acceptance, Singapore’s five-cent coin enters its twilight

SINGAPORE – “Even when you go to the toilet, you pay with 10- and 20-cent coins. Where is the use for the five-cent coin?” asked 65-year-old taxi driver Vincent Chia.

Speaking to The Straits Times while patronising a coffee shop in Woodlands, he said he has repeatedly had five-cent coins rejected when trying to make payment at several businesses – although his passengers accept the coins as change.

Mr Chia’s experience is not unique.

On Feb 24, Aljunied GRC MP Fadli Fawzi raised a parliamentary question on the cost of producing five-cent coins and whether the Government intended to remove them from circulation.

Mr Fadli told ST that he asked this after noticing how the purchasing power of the coin has declined over the years.

“Like many Singaporeans, I have noticed that many shops and eateries no longer accept these coins,” he said.

In a written reply, Deputy Prime Minister Gan Kim Yong, who is also chairman of the Monetary Authority of Singapore (MAS), revealed for the first time that the central bank has not minted any new five-cent coins in the past five years, and has no plans to do so at this stage.

However, he said MAS does not intend to stop the issuance of five-cent coins for now, because of continued public demand. Businesses continue to price items in five-cent increments, and stores charge five cents or 10 cents for disposable bags.

“Withdrawing five-cent coins from circulation could have an effect of retailers rounding up their prices and increasing costs to consumers,” he added.

Previously, MAS stopped issuing the one-cent coin in April 2002 after observing that it was no longer widely used. However, the one-cent coins that are in circulation remain legal tender in Singapore and can continue to be used as payment.

Experts whom ST spoke to expect the five-cent coin to follow the same trajectory.

Shop owners and customers across several heartland estates told ST that the five-cent coin is rarely used in daily transactions, with more stores rejecting or limiting its use for payment.

That said, usage still varies widely across different types of businesses and among customers.

Ms Ivy Goh, who operates a coffee shop and drinks stall at Block 892C Woodlands Drive 50, said she stopped accepting five-cent coins for payment in 2021 after encountering customers who paid in full using these coins.

Her business’ payment preference is made known to her customers via a written notice in both Chinese and English on her storefront.

Under the Currency Act, sellers can refuse certain denominations or reject cash payments altogether if they provide written notice to customers.

The same Act also says vendors are obliged to accept only up to 20 coins per denomination in a transaction. Customers, however, may not be aware of this.

MAS receives a small number of complaints each month about businesses rejecting five-cent coins without displaying a written notice to inform consumers of this, a spokesperson said.

In addressing such feedback, MAS engages these businesses to educate them on the written notice requirement, and encourages them to accept five-cent coins as payment where possible.

Ms Goh, 63, said accepting five-cent coins eats into her earnings. The only way she can use them is to deposit them at the bank, which may incur coin deposit fees.

She would not give five-cent coins to her customers either, to be “fair” to them, she added.

Meanwhile, Mr Zhan Mohammed Zulfizan, 42, who works at Li Feng Yuan Mini Mart in Toa Payoh Central, said the store accepts an unlimited number of five-cent coins.

Many of its products are priced in five-cent increments, so the mini-mart needs such coins to provide exact change. Even so, he noted that customers often leave behind the five-cent coins they receive as change – effectively treating them as “tips”.

The ones holding on to five-cent coins are typically elderly folk, said store owners ST spoke to, while most young patrons use cashless payment methods like PayNow.

Some seniors “would even scold us when we tell them we don’t accept five-cent coins”, Ms Goh said.

Speaking to ST at a foodcourt in Elias Mall, a Pasir Ris resident who gave his name only as Mr Ngeow said the five-cent coin is still useful, as some businesses continue to price products at amounts ending in five or 99 cents, which will be rounded down to 95 cents.

The 79-year-old retiree always transacts in cash. “Old people don’t know how to use PayNow. If I press something incorrectly, I can’t get my money back.”

He avoids paying hawkers with five-cent coins to avoid displeasing them. “You can see it on their faces when they are unhappy with it, though they don’t verbalise their displeasure.”

Mr Paticio, a worker at a duck rice stall in Elias Mall’s foodcourt, said the stall accepts a maximum of 50 cents’ worth of five-cent coins per transaction.

The 28-year-old, who did not want to give his full name, said customers often do not want to receive five-cent coins as change. But he uses them to buy goods at the nearby Sheng Siong supermarket, as the self-checkout machines accept an unlimited number of such coins.

Associate Professor Thomas Allard, who teaches and researches marketing at Singapore Management University, said the disappearance of the five-cent coin would have little impact on most consumers, noting Singapore’s continued shift towards cashless payments.

“Across generations, digital payments have become increasingly normalised, whether through PayNow, QR codes or mobile wallets.

“Because rounding works both up and down, the financial impact averages out over time,” he said, anticipating prices to be rounded to the nearest 10 cents.

Nonetheless, cash is unlikely to become obsolete soon, he added. Elderly consumers, small hawker businesses and some tourists still rely on cash.

“Cash also serves as a psychological anchor in transactions. It is tangible, trusted and universally accepted,” said Prof Allard. “So while more businesses may choose to go fully cashless, a hybrid system will likely persist for some time.”

Marketing associate professor Ang Swee Hoon from the National University of Singapore cautioned that five cents may not be an insignificant value, especially during an inflation.

“Five-cent denominated values may be a way for businesses to differentiate themselves. Price-sensitive consumers may find five-cent differences compelling in their purchase decision,” said Prof Ang.

MAS monitors the usage of coins by tracking the number of coins that banks request from and deposit with the authority over time, a spokesperson said.

“Over the past five years, most five-cent coins deposited with MAS have been reissued to banks to meet circulation demand. This indicates sustained public demand for the use of five-cent coins in daily transactions.”

The authority added that it will monitor the usage patterns and demand for five-cent coins to assess the relevance of this denomination in the longer term.