Singapore’s Cashless Revolution: How Far Can the Lion City Go Without Cash?

Singapore’s Cashless Revolution: How Far Can the Lion City Go Without Cash?

Singapore is often hailed as a global leader in digital innovation, and nowhere is this more evident than in its rapid shift toward cashless payments. From high-end shopping malls to humble hawker centres, the city-state’s payment landscape is transforming at a remarkable pace. But as Singapore races toward a digital-first economy, questions remain: Is it truly possible to live cash-free in Singapore? Who gets left behind in the rush to go cashless? And what does the future hold for cash in the Lion City?

The Rise of Cashless Payments in Singapore

Singapore’s journey toward a cashless society began decades ago, but the pace has accelerated dramatically in recent years. The COVID-19 pandemic, in particular, acted as a catalyst, pushing both consumers and businesses to adopt contactless and digital payment methods for hygiene and convenience. Today, Singapore boasts one of the highest cashless payment adoption rates in Southeast Asia, with 97% of retail point-of-sale transactions in 2022 made via cards, e-wallets, or other digital means, according to Statista and Visa’s Consumer Payment Attitudes Study.

Contactless card payments have become the norm, with more than 95% of Singaporeans using credit or debit cards for purchases. Mobile wallets and QR code payments are also on the rise, especially for public transport, food, and retail shopping. The Monetary Authority of Singapore (MAS) reports that e-payments doubled from S$627 billion in 2018 to S$1.25 trillion in 2023, while ATM withdrawals dropped by 10% over the same period.

Visa’s study found that nearly two in three Singaporeans have tried to go cashless, and more than two in five have succeeded for at least a week. The trend is not just among the young and tech-savvy; even older generations are increasingly embracing digital payments, though not without challenges.

Living Cash-Only in a Cashless World: An Experiment

To understand the realities of Singapore’s cashless transformation, a journalist attempted to live using only cash for a week. The experiment quickly revealed how deeply cashless payments are embedded in daily life. Even with careful planning, it was easy to slip up—using a ride-hailing app like Grab, for example, automatically defaulted to a stored credit card. Public transport, too, offered no cash option for MRT rides, and many cafes and shops had gone fully cashless.

Paying with cash often meant longer queues, fumbling with coins, and sometimes paying higher fares—bus rides, for instance, cost more in cash than with a card. Some merchants, like certain branches of Starbucks and Decathlon, have gone entirely cashless, citing operational efficiency and customer convenience. Others, especially in the heartlands and hawker centres, still accept cash, but even here, QR code payments are becoming common.

One Grab driver noted that only one or two passengers a day pay with cash, often young people trying to track their spending. For many, the biggest hassle was making change, a problem that was less common when cash was the default.

Why Some Businesses Still Say “Cash Only”

Despite the digital wave, cash remains king in certain corners of Singapore. Many hawker stalls, small shops, and traditional businesses continue to prefer cash. A 2018 study by the Singapore University of Social Sciences (SUSS) found that only about 40% of hawkers accepted mobile payments at the time, though this number has likely increased since then due to government initiatives like the Hawkers Go Digital programme.

There are several reasons for this resistance:

• Cost Barriers: Transaction fees and the cost of smartphones or payment terminals can be prohibitive for small businesses with thin profit margins.
• Tradition and Familiarity: Many hawkers are older and less tech-savvy, preferring the tangibility and simplicity of cash. Handling cash is also the norm for paying suppliers.
• Trust and Security: Some fear making mistakes with digital payments or being scammed. Others worry about the reliability of digital systems, especially during outages.
• Customer Base: Many regular customers, especially seniors, still prefer to pay in cash.

Ms. Ng Siew Lian, a wanton noodle and laksa hawker in her late 60s, summed up the sentiment:

“All my customers know that my stall only takes cash, especially the regulars, they always bring cash, even the children. It’s good for them to handle cash, if not they might not know our first president.”

For those who do not bring cash, Ms. Ng is flexible, allowing them to pay later. She and her sister, who have run their stall for over 40 years, do not own mobile phones and see no need to change as long as their customers are content.

Cashless-Only Shops: Efficiency, Security, and the Customer Experience

On the other end of the spectrum, some businesses have embraced a cashless-only model. Decathlon, a major sports retailer, went fully cashless in June 2020, offering 15 different payment options but no cash. The company’s CEO in Singapore, Stephan Veyret, highlighted the benefits:

“We’ve seen a notable improvement in operational efficiency and security, and this has allowed our teammates to focus their energy on what they do best: Interacting with customers and providing expert advice to support their sports journey.”

Starbucks has also transitioned 39 of its outlets to cashless-only, with decisions guided by customer profiles and store-specific considerations. Stores frequented by tourists or with higher cash usage still accept cash, reflecting a pragmatic approach to inclusivity.

Under Singapore’s Currency Act, merchants are allowed to refuse cash as long as they provide written notice. The MAS emphasizes that the goal is not to force a cashless society but to enable convenience and efficiency while ensuring no one is left behind.

Tourists and the Challenge of Payment Options

For tourists, Singapore’s payment landscape can be both convenient and confusing. International visitors can use credit cards, and the SGQR system—Singapore’s unified QR code—allows payments from a variety of apps, including foreign ones like Alipay and WeChat Pay. However, some tourists still find themselves “locked out” of local experiences, such as buying food at hawker centres or shopping at small stalls that do not accept cards or foreign e-wallets.

Visa’s Global Travel Intentions study found that only 31% of Asia Pacific travelers brought cash in 2023, down from 79% in 2020, reflecting a broader shift toward digital payments. Yet, the need for inclusive payment options remains, especially for visitors from less cashless countries or those without access to local payment apps.

Regional and Global Context: Singapore’s Place in the Cashless Race

Singapore is not alone in its cashless ambitions. Across Asia, countries like China, South Korea, and India are pushing digital payments aggressively. In China, cash transactions are expected to drop to just 3% by 2027, while in India, the Unified Payments Interface (UPI) has revolutionized mobile payments. Singapore’s own PayNow system is now linked with Thailand’s PromptPay, enabling instant, low-cost cross-border transfers using just a phone number—a model that ASEAN hopes to expand regionally.

Globally, the trend is clear: cash is declining, but it is far from dead. The Bank for International Settlements notes that while electronic payments are rising, cash in circulation has actually increased in many advanced economies, often as a store of value rather than for daily transactions. In Singapore, cash use at point-of-sale is projected to fall to just 7% by 2027, but it will likely remain a vital backup and a preferred option for some segments of society.

The Benefits and Risks of Going Cashless

The shift to cashless payments brings numerous benefits:

• Convenience: Faster transactions, no need to carry cash, and easier expense tracking.
• Efficiency: Reduced costs for businesses in handling, storing, and transporting cash.
• Security: Lower risk of theft and better record-keeping.
• Economic Growth: Studies by the Boston Consulting Group suggest that digital payments can boost GDP by increasing the velocity of money and reducing the gray economy.

However, there are also risks and challenges:

• Exclusion: Seniors, low-income individuals, and those without smartphones or bank accounts may be left behind.
• System Outages: Digital payments rely on power and internet connectivity. Outages can leave consumers stranded, as seen during recent banking disruptions in Singapore.
• Privacy and Security: Digital transactions create data trails, raising concerns about privacy and the risk of scams or cyberattacks.
• Merchant Costs: Transaction fees can eat into the slim margins of small businesses, especially hawkers.

Dr. Lee Yen Teik of the National University of Singapore notes:

“Cash is the ultimate backup plan; it works without power or an internet connection. A truly strong system has backup options at every level. This means considering simple and low-tech alternatives and, most importantly, ensuring cash remains a viable and accepted option so there is always a fallback that works.”

Government Policy: Evolution, Not Disruption

Singapore’s approach to digital payments is evolutionary rather than disruptive. The MAS and Singapore Payments Council work closely with businesses to ensure financial inclusion and resilience. Initiatives like the Hawkers Go Digital programme, fee subsidies, and digital literacy workshops for seniors aim to bring everyone along on the cashless journey.

Education and support are key. DBS Bank, for example, has conducted workshops reaching 37,000 seniors, with 83% successfully completing at least one cashless transaction afterward. The government also requires financial institutions to recover from critical outages within four hours, but experts stress the need for cash as a backup.

As MAS spokespersons have repeatedly emphasized, the goal is not to eliminate cash but to provide choice and ensure no one is left behind.

What the Future Holds: Will Cash Disappear?

Projections suggest that cash will continue to decline in Singapore, possibly falling below 7% of point-of-sale transactions by 2027. Digital wallets are expected to overtake credit cards as the most popular payment method within a few years. Yet, surveys show that a significant minority of Singaporeans still favor cash, especially for small, in-person transactions. A YouGov survey commissioned by Stripe in 2024 found that 60% of respondents still selected cash as one of their top three preferred payment methods for in-person payments, though 61% believed they would stop using cash within the next decade.

Globally, the persistence of cash is driven by its inclusivity, reliability, and the emotional connection people have with physical money. Even in highly digital societies like Sweden and South Korea, cash remains a fallback and a symbol of trust.

Singapore’s future is likely to be “less-cash” rather than “cashless”—a society where digital payments dominate but cash remains available for those who need or prefer it. The city-state’s experience offers valuable lessons for other countries navigating the balance between innovation, inclusion, and resilience.

In Summary

• Singapore is a global leader in cashless payment adoption, with 97% of retail transactions now digital.
• Contactless cards, mobile wallets, and QR code payments are widely used, but cash remains important in certain sectors, especially among hawkers and seniors.
• Government policy emphasizes inclusivity and resilience, supporting both digital innovation and the continued availability of cash.
• Cashless-only businesses cite efficiency and security, while cash-only businesses value tradition, simplicity, and customer familiarity.
• Tourists benefit from unified QR systems but may face challenges at cash-only stalls.
• Digital payments bring convenience and economic benefits but also raise concerns about exclusion, outages, and privacy.
• Singapore’s approach is evolutionary, aiming for a “less-cash” society where choice and backup options remain available.