Cash is still king in Singapore

Anuradha Shukla

40 percent of consumers in Singapore prefer paying with paper for daily spending, according to Nielsen's Global Survey of Saving and Investment Strategies.

39 % of those who pay with plastic instead of paper use their credit card, 14% use their debit card and 2% use their prepaid card for daily expenses.

74% respondents in Philippines, 68% in Thailand, 61% in Vietnam, 60% in Malaysia and 51 % in Indonesia depend on cash payment.

49% of Singaporean respondents are comfortable shopping on the web. These shoppers use their payment card on smartphone and tablet device if they are sure their personal information is safe.

"There are opportunities to extend the usage of cash alternatives in Singapore, especially among consumers who rely more on cash payments (such as older consumers and less affluent consumers) for those transactions that are still predominantly paid for in cash," said Luca Griseri, head of Financial Services, Nielsen Singapore and Malaysia.

Competitive credit card market

Issuers of credit card have become very competitive as they are trying to encourage consumers to use their cards more often.

Singaporeans use more than three cards more often in contrast to consumers in other Southeast Asia nations.

"In Singapore, many options are available to consumers who want to pay without cash (such as contactless technology) but it is important to understand the barriers and reasons why many consumers in Singapore prefer cash over credit cards," said Griseri.

22% of Singaporean respondents said they may consider using their credit or debit cards for online payment. 29 percent consumers in the city declined using their cards on either a smartphone or tablet.

Griseri advises payment providers to educate consumers about the real costs of using cash, about safety and the benefits of using other payment alternatives.

Singaporean government should take initiative to educate citizens on using non-cash payment and retailers should be involved at the point of sale to help consumers explore cashless payment alternatives.