LETTERS: Banking penetration in Southeast Asia, home to 650 million people, remains low, with only 47 per cent of the population having a bank account.
The percentage is higher in the Philippines (77 per cent), Vietnam (65 per cent) and Indonesia (52 per cent).
In this context, pushing too hard and too fast towards a cashless economy is bad for business.
If a company refuses to take cash, that leaves a lot of the world’s money on the table.
The rise of cashless commerce threatens to marginalise many consumers in emerging-market countries because people may not have bank accounts and merchants may not have access to electronic payment technology.
For financial institutions, technology is not a one-size-fits-all approach. Rather, it is a tool to provide customers with flexibility and choice in managing their money.
An all-digital approach is a recipe for failure as the benefits of going cashless will not outweigh the cost of society leaving economically-vulnerable people behind.
While mobile phones give people opportunities to access financial resources, the world is a long way from having a fully-functioning cashless economy.
The key for financial institutions is to own their responsibility in how customers manage their money in the way that best suits them.
This is how we can move consumers up the financial value chain and take a step to financial inclusion for all.
Despite the increasing availability of alternative payment methods, such as mobile transfers and QR codes, many prefer cash, and cash remains the most widely-used payment method in the world.
Also, despite Singapore’s push for cashless payments as part of the government’s smart nation initiatives, some sectors and demographics are hesitant to adopt mobile payment alternatives.
According to a report by S&P, cash and cheques account for 40 per cent of payments in Singapore because of the country’s ageing population.
This can also be observed in Japan, one of the most technologically-advanced nations, where four out of five purchases are made with cash.
Technology can reshape economies by building bridges that connect people who are digitally advanced with those who are not yet online. An all-digital business approach has benefits and limitations.
Amazon PayCode is a prime example of how a business has got around this, and instead links the digital and physical worlds of money worldwide.
Amazon PayCode is a new payment option that enables you to shop online and pay in cash.
By not sticking with a digital-only strategy, it can serve millions of potential new customers in underserved regions who want greater access to products.
Customers’ needs are evolving, and their preferences are fluid. If one person prefers to pay for coffee in cash, that should be an option.
Conversely, if someone wants to buy the same cup of coffee using QR payments, the option should also be available.
The best way to serve customers’ needs is collaboration between companies to provide services and solutions online and offline, giving customers a choice rather than limiting them to cash-only or digital-only transaction options.
If businesses can strike a balance in catering to customers’ needs and wants, they can better navigate the fintech landscape.
SOHINI RAJOLA
Singapore
The views expressed in this article are the author’s own and do not necessarily reflect those of the New Straits Times