DBS’ journey to a cashless society

Earlier this year, DBS partnered with Koufu, one of the leading food courts in the city state. It is emblematic of the way that DBS is at the forefront of Singapore’s journey to a cashless future, as their journey is part of Singapore’s Smart Nation drive to adopt cashless payments. 

According to official figures, 80% of payments made at small shops in Singapore are still made in cash. At hawker centres and wet markets, this rises to 90%. The lack of ubiquity in cashless payment acceptance by merchants discourages consumers from making the transition to cashless payments. One of the obstacles to widespread cashless payment adoption is that there are still various myths circulating – that high costs are involved in setting up the infrastructure to process payments; it is unsafe; it is complicated to use for both merchant and consumers, etc.

DBS set up the Smart Nation Ambassador Programme (SNAP) as an outreach programme to help debunk these myths and demonstrate to businesses how going cashless can be low-cost, easy and raise business productivity, taking Singapore one step closer to its vision of a Smart Nation. Singapore is well-primed to become less cash-reliant and to transition to digital payments. However, while technology and infrastructure are key, the bank believes a multi-pronged approach is required to accelerate e-payment adoption. This includes:

• Raising public awareness of the benefits of adopting digital payments for consumers – it’s simpler, faster, traceable and safe 

• Supporting and enhancing payments ecosystems with easy-to-use options to meet customer and merchant payment needs and preferences – DBS/POSB offers customers a variety of options to make mobile payments and was one of the first in Singapore to adopt all three mobile payment platforms – Apple Pay, Samsung Pay and Android Pay

• Building up acceptance of digital payments across retailers by highlighting its safety and efficiency, especially with smaller businesses with real (costs of implementation) and perceived (fear that e-payments are unsafe) concerns. This includes demonstrating that there are real productivity gains by adopting digital payment technology. For instance, Old Tea Hut, which serves takeaway coffee and tea, saw a 10% sales increment since implementing DBS FasTrack in May 2016, without any additional manpower. It has also removed the need for another cashier during rush hour since orders and payments are automated via DBS FasTrack.  Since then, major foodcourts like Koufu, local chicken rice chains such as Boon Tong Kee and Five Star Hainanese Kampung Chicken Rice Restaurant have also adopted the DBS FasTrack solution with many others in the pipeline

• Having a well-thought out national enablement plan involving stakeholders in the ecosystem, such as the government, banks, merchants and consumers

• Applying a suitable technological platform that will serve to improve the journey of service providers and consumers, creating the motivation and impetus to adopt.

DBS is pushing cashless in a way few banks are doing. “Our role is to support both sides of the transaction while encouraging the consumer to allow digital transactions to happen,” says Jeremy Soo, Managing Director and Head of Consumer Banking Group (Singapore), DBS Bank. “For DBS, it is not enough to just provide the wires and pipes for the transmission of digital payments. You need to embed yourself in the customer journey itself to be a close to both the consumers and the merchants to get deep adoption of cashless payment.”

For instance, in 2014, the bank launched its digital wallet DBS PayLah!. This mobile app allows DBS/POSB customers to send and receive funds instantly outside of the internet banking environment. Despite concerns that bank customers have regarding security, privacy and inconvenience, the app was an immediate success, with 5,000 people signing up in the first week alone. By this year, that number had grown to more than 600,000. Not bad for a city with a population of five million. 

In April this year, DBS announced a vital new iteration for PayLah! In a Singapore first, all DBS PayLah! users – including non-DBS/POSB customers – can now pay using QR codes and also receive funds by generating their own QR code. This is a key step in the journey to a cashless world. QR codes reduce the need for expensive and technical point of sale equipment. In China, they are ubiquitous and one of the main reasons that country is so advanced in fintech.

But perceptions matter. And Soo notes that “many merchants think QR codes are technically difficult and complicated, so we needed to go and out and tell them that they are not”. DBS bankers went out and met with 9,000 individual merchants, in the first month alone, explaining how the QR code system works. “The merchants we met were very receptive, especially when we showed that there were no terminals, or leased lines,” he says. “They have also heard about how successful they have been in China and that is helpful.”

DBS is also mapping out which industries might be ripe for becoming entirely cashless. One example is the education sector, where DBS has undertaken a number of initiatives. In August this year, POSB, a part of the DBS Group, officially launched Smart Buddy after a year of pilot testing. This ground-breaking programme – the first of its kind – creates a contactless payments ecosystem within schools to help cultivate sensible savings and spending habits among young students. Its accompanying mobile app allows parents to remotely manage their children’s spending and savings, while empowering students to monitor their own finances.  

“We believe that POSB Smart Buddy represents a paradigm shift for Singapore’s education sector – not only by changing the way students save and spend – but by creating a digital payment ecosystem within schools,” says Soo. “It transforms the age-old ‘pocket money’ tradition, teaches students how to manage their expenses and save wisely, and provides small business owners in schools greater incentive to adopt digital payments. To truly become a Smart Nation and for us to fully embrace digital payments, we aim to educate the students of today so that they are well prepared for the technology of tomorrow.”

DBS is partnering with vendors, service providers, IT developers and of course its customers as they turn Singapore into a Smart Nation, a nation with a much-reduced reliance on cash. This process is ultimately about more than just replacing the notes and coins in your pocket. It changes whole industries, while pushing new business opportunities. It is something to think about when your next waiting for your meal to arrive at a food court.