Singapore Economic News

[RachelProp]

Google's coronavirus mobility report shows gradual return to workplaces since reopening after circuit breaker measures

https://www.theedgesingapore.com/news/co...ning-after

[RachelProp]

OECD reports record fall of 3.4% in G20 GDP for 1Q20

https://www.theedgesingapore.com/capital...0-gdp-1q20

[Greenrookie]

Hi valuebuddies,

Have some questions and like to hear your thoughts and views

First, how is digitalisation of payments for hawkers, mum and pop shops going to help them?

Yes, it will help banking, with more accounts, manufacturing with the production of hardware. How is it helping them in terms of new demand or lowering of costs (I see increase of costs)

Yes, people can order online, but paynow should suffice?

I am not against digitisation, I am just wondering if the papers are screaming "helping hawkers" hypocritally

2) is globalisation and effecient allocation of costs overrated?

Will.redirecting of some supply chains locally for resilience and lesser profits and higher costs, necessarily be a high economic costs? ( Cost, yes, but really to the extend of job displacement, economic ruins, like some papers are suggesting ??)

[retired1again]

I believe the payment digitalisation would help in at least 2 areas for the Hawkers.

Reducing or eliminating (in the perfect and ideal case) cash handling including, separating and keeping the cash, calculating and returning the changes if the customer is not paying the exact amount.

This helps to increase their productivity (time saved in handling cash could be utilised to served more customers and hence more revenue) and to improve the food hygiene (as currency notes and coins are amongst the most dirty items in terms of bacteria and viruses).

[Dosser]

At my local wet market in the New Territories in Hong Kong almost all of the stalls accept contactless payment by Octopus card. In Canada, even the food trucks that park outside the office have accepted paywave for years. So I don't see why the hawker stalls and small stores here have been so slow to adopt this. Singapore seems to have been very slow on the uptake for contactless payment, but one of the (few) benefits of COVID-19 has been rapidly increasing acceptance.

[dreamybear]

If we read abt Singapore's reputation*, it is hard to reconcile why our adoption is still "behind". Cashless wld mean lead to an increase in productivity in reducing manual tasks like record keeping and yes, focussing on other more "value-added" tasks.

With different schemes going on (e.g. Workfare Supplement, CPF, Tax), having manual records could also mean it could be more susceptible to "manipulation"**; intended / unintended discrepanices relating to various levels of salary ceiling/cut-offs. Thus, digitalization would help in keeping consistent records for all parties(vendor, landloard, authorities, customers, employers etc).  

On a separate note, I also noticed quite a number of people(those without trolleys) still queue for the cashier rather than use self-checkout at NTUC fairprice outlets, despite the fact that there is a long queue at the cashier and NO queue at the self-checkouts. It seems our population is still behind other countries which have adopted cashless systems.

*https://www.worldbank.org/en/country/singapore/overview

** https://www.straitstimes.com/singapore/k...-tax-fraud
"In 2007, Looi San Cheng, who sold his Tip Top curry puffs from his Ang Mo Kio stall, became the first hawker here to be jailed for tax evasion. He made $1.06 million over six years but declared profits of only $2,800 between 2001 and 2006. He was jailed for two weeks and fined $196,000. Four other charges against him were withdrawn after he paid another $291,000 to compound them."

[Bibi]

As long as nobody wants to absorb the cashless "convenience fee", mass adoption will not be high. I am put off by having the need to pay 10 or 20cts convenience fee each time i top up my mrt nets card using credit card. I do not mind topping up at mrt station machine for free. There are also some shops which do not accept credit card payment because they do not want to absorb such fee. I remember few years ago, Comfort Delgro wanted to pass credit card convenience fee to the consumer but the credit card companies told comfort that is not allowed. Comfort proudly declare credit card payment no longer allowed in taxis. But they suck thumb and did a u-turn when private car hires came in.

[karlmarx]

If you happen to be in China, and you're using cash for payments, you're almost certainly not a local. Its pretty amazing that almost everyone, everywhere in that country, does not use cash.

Not only is the pandemic a good opportunity for the SG government to digitise more parts of the informal economy, there will also be greater encouragement for companies to adopt some form of WFH arrangements, which will dovetail nicely into their previous attempts of alleviating (peak hour) traffic loads. For a period, there may be some adoption of such practices.

But over the long term, people will probably gradually return to their workplaces.

[Ben]

As the owner of a small eatery shop, I welcome digital payments with wide open arms. Cash transactions is a hassle. There is always a need to keep sufficient float, in different denomination of notes and coins (yes, we frequently run out of coins, and to exchange it from bank involves costs). Then there is the counting and tallying against POS at end of day and the banking in the next day. And to have too much cash in the POS is also a tempting factor for staff stealing.

These are but just some examples of the downside of using cash.

However, I do agree with Bibi that the low take up rate is mainly because of cost involved in using the various form of digital payments. Fave is very popular, because users get to enjoy a cash-back which can be as high as 10%. But this 10% is being borne by the merchant, not Fave.

GrabPay is also quite popular as users get points for payment. Merchants were charged a small fee of less than 1% for each transaction.

Corporate PayNow is getting popularity now. For now, it’s FOC for incoming payment but a 50 cents transaction fee for each outgoing payment.

Certainly, with this pandemic plus govt push to go cashless, I believe cashless payment will be widely used in times to come. As long as costs can be kept low for merchants, digital payment is the way to go.

So, will credit cards become a thing of the past, just like Kodak film?

[karlmarx]

Human desires are unchanging, but the means (or technology) of fulfilling those desires change over time.

There was no way for Kodak to survive in the capacity and size of what it was at its height in the 90s. The compact digital cameras and later, (semi) professional digital cameras (DSLR) which came after it were made obsolete within only a very short 10 or so years. The few that are still using DSLRs are no longer the casual hobbyist but the professional. So even though Kodak did invest the digital camera in the 80s, it still wouldn't have allowed the company to survive much longer when film cameras were in decline. Smartphone cameras destroyed the entire consumer camera market.

There was an attempt to transform itself into a provider of photo-printing services for digital camera users. While the market for physical photos still exists (for framed pictures hung in your living room?), we all know that photos are no longer shared physically. So Kodak was killed a second time by high-speed internet and the social media platforms which run on it.

In the case of Kodak, its business was based on the human desire to record memories, and to share them. Those two desire has not changed, only the means (or technology) to do so.

Perhaps the lesson from Kodak is that some disasters/declines are simply unavoidable.