The future of cashless payment at hawker centres and coffee shops could involve scanning a quick response (QR) code that looks like a mesh of pixelated squares, with the Government pushing for this.
But consumers may need a strong nudge to use QR code payments at hawker centres and coffee shops, The Straits Times has found.
QR code payments were in the spotlight after Prime Minister Lee Hsien Loong cited China's success with WeChat Pay and AliPay's QR code schemes even at street hawker stalls, in his National Day rally speech in August last year.
He hoped a unified cashless payment system at hawker centres and coffee shops, where cash is currently king, could be set up.
Soon after, local e-payment giant Nets, telco Singtel and ride-hailing services firm Grab rolled out QR code payment schemes at hawker centres, coffee shops and canteens here. Liquid Pay, which rolled out its QR code system at some hawker stalls a year ago, also entered the spotlight. All four use an e-wallet downloaded to a mobile phone.
But in a visit last month to three hawker centres, two canteens and one coffee shop which have at least one of the four QR code payment systems available, The Straits Times found that the more successful schemes enticed merchants or customers to use them through discounts or rebates.
The eateries visited were selected to reflect the variety of QR code payment types accepted. But acceptance of the payment types is uneven across eateries.
A PLUS FOR GOING CASHLESS
It is more hygienic not to handle cash.
MR BENSON LOW, 55, who sells laksa and prawn mee at Tanjong Pagar Plaza Market & Food Centre. One in 10 of his customers scans the Nets QR code for payment, the highest use among hawkers there. Four times as many people use their ATM cards, using the stall's Nets card reader.
A MARKET FLOODED BY CREDIT CARDS
There is a market gap in China that Singapore does not have. Credit card ownership is low in China as there are restrictions on who can open accounts.
MR JAMES LLOYD, consultancy firm EY's Asia-Pacific fintech leader, on why Singapore may not repeat the success of e-payments seen in China. Hawkers are not a particularly profitable micro-segment for e-payment firms. And where it makes sense to go cashless, the market in Singapore is already dominated by credit cards, which consumers prefer to use because they earn rewards.
Singtel's Dash is currently accepted at a handful of locations, including Singtel canteens, as well as those in Nanyang Technological University (NTU), Ngee Ann Polytechnic and Nanyang Polytechnic. Its e-wallet is a stored value system that requires topping up from a linked credit card.
It is successful among Singtel staff at the Singtel Comcentre canteen, which is open to the public.
Stallholders said that up to four in five Singtel employees use Dash to pay for their food as they get discounts for using it.
Madam Ann Lim, 53, a drinks stall worker, said she charges Singtel staff only 80 cents for a cup of coffee, instead of the standard price of $1.30, if they use the e-wallet.
However, stallholders said the discounts do not apply to the public, so outsiders do not bother with the cashless system.
Out of the 14 foodcourts at NTU, just two accept Dash. But only one has signs telling patrons about it - the Nanyang Crescent Halls foodcourt.
Even so, when The Straits Times visited that canteen, stallholders said only a few, if any, use Dash as there are no perks involved.
The GrabPay e-wallet, used mostly at air-conditioned joints, is a stored value system that requires topping up from a linked credit card. Eden Garden Cafe is the only non-airconditioned coffee shop found to be using the system.
Patrons of Eden Garden Cafe, a coffee shop in Telok Ayer Street, are taking well to a promotion. For every 20 transactions made in GrabPay, merchants get $10 back. And consumers who spend at least $3 a week at stores using GrabPay get $5 off a Grab ride the week after.
Stallholders at Eden Garden Cafe said up to 30 per cent of their customers use the GrabPay e-wallet.
Said Mr Nornizam Amin, 47, who sells Indonesian food, of GrabPay: "It helps when people come with $50 notes and I don't have change."
Nets represents seven major banks here, and its e-wallet is linked to ATM cards for direct debit from consumers' bank accounts. More than 1,000 hawker stalls have installed its QR code system.
In November, Nets and local banks DBS Bank, OCBC Bank and United Overseas Bank launched a $15 million campaign to promote cashless payments at hawker centres.
Until the end of this month, $28 cash rebates will be given monthly to the first 288 customers of each of the three banks who make eight cashless transactions of at least $2 each at a handful of participating hawker centres. These include the Tanjong Pagar and Old Airport Road markets.
The top three hawkers at each participating food centre who clock the highest number of cashless transactions monthly will receive $388, $288 and $188 respectively.
Of the 50 stalls at Tanjong Pagar Plaza Market and Food Centre, 45 display the Nets QR code and have Nets' card readers to let consumers use their ATM cards.
Mr Benson Low, 55, who sells laksa and prawn mee, said one in 10 of his customers scans the Nets QR code for payment - the highest use among hawkers there. Four times as many people use their ATM cards. "It is more hygienic not to handle cash," said Mr Low.
But using QR code may not be as fast as cash.
The Straits Times asked to pay for a $1.20 cup of soya bean milk by scanning the Nets QR code, but was told to pay in cash to prevent holding up the queue. The stallholder said: "It is too troublesome for transactions less than $5."
At the Old Airport Road Food Centre, fewer than half of the 168 stalls have installed the Nets QR code system. Mr Teh Wei Liang, 23, who helps out at a drinks stall, said patrons are mostly the elderly who use only cash.
The Liquid Pay e-wallet is linked to a credit card for purchases. It listed on its website many hawker centres as merchants, but only a handful of stalls in each hawker centre uses the system.
For instance, the Liquid Pay QR code was on display at a handful of stalls in the Old Airport Road Food Centre. Usage was said to be non-existent. A ngoh hiang stallholder said he wants to cancel the facility as no one uses it.
A handful of the 50 stalls at the Marine Parade Central Market and Food Centre also displayed the Liquid Pay QR code. A chicken rice stallholder said fewer than 1 per cent of his customers use it.
Hawkers said there is no ongoing promotion for Liquid Pay.
Jay Gee Group managing director R. Dhinakaran, who is also president of the Singapore Retailers Association, said it is still early days and hawkers and consumers must be given time to adjust to a new payment system that requires them to download and use an e-wallet.
Mr Dhinakaran, who sits on the Monetary Authority of Singapore's Payments Council, said e-payment service providers might have to continue to give rebates and discounts for a few more years before consumers can be "trained" to go cashless at hawker centres.
He expressed optimism that "once consumers are used to e-payment, they will not go back to using cash payments even when the rebates are withdrawn".
However, Mr James Lloyd, consultancy firm EY's Asia-Pacific fintech leader, said that the economics may not make sense for e-payment firms as hawkers are not a particularly profitable micro-segment.
Where it makes sense to go cashless, the market in Singapore is already dominated by credit cards, which consumers prefer to use because they earn rewards, he said.
Singapore may not repeat the success seen in China, he added.
"There is a market gap in China that Singapore does not have. Credit card ownership is low in China as there are restrictions on who can open accounts," he said, adding that cash is likely to remain the currency of transactions at hawker centres.