Promote cashless payments

There is a fear among some people that cashless payments, e.g. through e-wallets, allow the govt to track the spending of citizens.

This fear is misplaced.

The e-wallet payments are micro-payments. They are payments of small amounts, e.g. to hawkers and small retailers.

There are more than 30 million transactions a day, assuming 6 transactions for each person.

If the govt wants to track the transactions of any individual person, they can already do it through the banking system. These payments are made through bank transfers and credit cards. These payments are larger and more significant.

There is no need for the govt to go down to track the micro-payments.

Furthermore, the payments are for spending at outlets and do not go down to the individual items that are purchased.

So, this fear is unfounded.

Many people still prefer cash, because they can draw it out of ATM machines without paying any charge. They can also bank in cash without any fee.

The banks have to incur costs to provide these cash withdrawal and deposit services. These cost are not negligible.

If the banks were to introduce a fee for cash withdrawal and cash deposit, the cost may encourage people to move towards cashless payments.

I know that the banks are already making big profit. These new fees will increase their profits.

In return for allowing banks to impose these fees, MAS should insist that the banks provide a higher interest rate for savings and fixed deposits.

This will offset the fees that have to be paid by consumers.

If we do not make this change, we will continue with our inefficient and costly payment system, while other countries move ahead.

Tan Kin Lian