Whether to better manage back-end operations or for a more seamless customer experience, cashless is the way to go in Singapore – if you know how to make the most out of it.
On the surface, cash is already on its way out.
Consumer payments in cash (as % of total transaction volume)
A 2018 report by UBS found cash to be a diminishing mode of payment in several Asian countries. In Singapore, for instance, consumer payments in cash make up only slightly over 40% of total transactions, with cashless payments accounting for the rest.
Perhaps it’s no surprise – a digitally literate society, widespread ownership of smartphones and debit/credit cards, and an advanced economic landscape put these Asian financial hubs, Singapore included, at the forefront of this digital disruption.
But look beyond these statistics and it’s easy to identify many industries in Singapore where cashless payment and going digital is still a daunting prospect, especially for back-end operations. Even if there is a general consensus that going cashless pays, implementing this still-novel approach into one’s business strategy is a barrier in itself. Take for instance transactions between restaurants and suppliers in the F&B industry, much of which still involve manual invoicing and even cash payments. After all, cashlessness is only possible with progress on the digital front, and where digitisation only goes as far as PDF documents or scanned invoices, this prospect might look bleak.
A big step towards a cashless Singapore
This prompted the implementation of Singapore’s national e-invoice system, which was first announced by former Minister for Communications and Information Yaacob Ibrahim during the 2018 Budget, and again echoed by MCI Minister S. Iswaran at the inaugural SG: Digital Industry Day this May.
This electronic invoicing system helps businesses process payments more efficiently by filtering out the need for tedious manual work involved in traditional invoicing procedures.
Businesses are also paid faster, ensuring more fluid cash flow.
Given the current circumstances of the F&B industry, the benefits lie not only in finance management, but also permeate every aspect of business operations. Through a centralised ordering channel made possible with digital innovations such as Zeemart, kitchens are able to better keep track their orders from various suppliers and strategize their operations accordingly. This also means ingredient orders from a restaurant can be streamlined and collectively fulfilled, rather than getting multiple deliveries at different times of day, easing the workflow of the already busy kitchen.
The prior lack of digitisation in this department might, ironically, be due to the monumentally rapid movement of finance technology. How can businesses possibly keep pace when a new “disruptor” sprouts up by the time they decide to adopt an existing solution? So we can’t fault a business if their strategy to move forward is to first stay put – identifying when to move is more crucial and cost-effective than staying at the cutting edge.
In MCI’s books, at least, the time to move is now. The nationwide eInvoicing system promotes an eventual move towards a singular invoicing platform integrated into every business’s core system. This allows businesses to adapt their operations in tandem with the progress of digital technologies, rather than struggle to keep up.
As for front-of-house operations, proponents of digital payment technologies hail the multitude of options available, should you decide to go cashless – diners can choose to pay via digital wallets such as Grabpay, credit or debit card, EZ-link, or even QR codes. And perhaps, again, this is the very problem for businesses: Having to cater to customers with all of these different payment preferences, all of which don’t talk to each other. The cost of having different terminals and technologies for each payment method, fragmented from the rest, is a lot to bear.
Things are looking brighter, though. In late 2017, the Monetary Authority of Singapore (MAS) and and Infocomm Media Development Authority (IMDA) introduced a common Singapore Quick Response Code (SG QR) to be implemented by multiple payment schemes. The consortium of payment networks, including Diners Club, Mastercard, UnionPay International and more allows businesses to accept QR payments from these mobile wallets on a single merchant system, effectively standardising payment protocol; in the same vein, NETS QR, also a part of SG QR, facilitates payments from NETSPay as well as bank mobile apps like DBS PayLah!, OCBC’s Pay Anyone and more.
And even businesses less likely to open up to cashless payments have been joining in. In April – only half a year after NETS QR payments were introduced – more than 2,000 hawker stalls across Singapore have taken to NETS QR code payments. Looking at the numbers, it’s for good reason. NETS reported that transactions via this payment channel had doubled every month, translating into a 3000% increase in total usage.
Furthermore, giving customers a more convenient payment process is but a small part of the big picture. The wide array of options shouldn’t be a deterrent – in fact, it gives businesses tons to leverage on.
Take Get Juiced, Singapore’s first cashless club, for example. Through the dedicated GetJuiced SG app – which has had more than 10,000 downloads in barely a year – users enjoy special deals such as cheaper drinks, and the convenience of ordering and paying for food and drinks from anywhere in the 8000 sq ft venue. And anyone who’s ever attempted to physically order a drink in a club would be able to vouch for this genius function.
What Get Juiced gets in return? Most notably, a better understanding of their customers with data garnered from app activity, which can drive business insights significantly. Clearly, the app was no afterthought – it holds its own as a business planning tool.
Doing more with less cash
A lot is to be said about how businesses can position themselves in this increasingly digital landscape, and how to reap the benefits of doing so. Going cashless – or, at least, going “less cash” – through digital innovations is more than just a step towards the latest trend; rather, it’s a key strategy to optimise business strategies. And for Singapore’s F&B industry, it looks like the start of a radical step towards a promising future.
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