Singapore taps digital payments everywhere, but cash still lingers

• Control and budgeting: Cash makes spending more visible and tangible, helping people track and limit their expenses easily.
• Convenience and acceptance: Cash is seen as easy, fast and universally accepted. It works everywhere (for example, at wet markets and when overseas) without needing data, apps or a phone.
• Habit and tangibility: Habit and emotional comfort drive the use of cash – people are familiar with it and like the physical feel and the look of money.
• Fear of tech overreliance and reliability gaps: Cash is a reliable fallback – no dependence on connectivity, batteries or app updates. It is also easier for the elderly or less digitally confident.
• Security and scam avoidance: Many prefer cash because it feels safer – it comes with less risk of hacking, double charges and scams, and it offers privacy and is less traceable.

In particular, it continues to provide a sense of security for those aged 55 and above, alongside credit and debit cards.

The survey showed that cash remains the dominant mode of payment in places such as hawker centres, where it is still widely used and often preferred among the silver generation.

Cash is also used to express sincerity.

Mr Liew uses it only on rare occasions, such as when giving hongbao, or red envelopes, to family and relatives during Chinese New Year, as he finds the gesture more personal and heartfelt than giving money digitally.

He adopts a similar approach for wakes. On one occasion during the Covid-19 pandemic, he sent condolence money digitally as he was unable to attend the wake. “Otherwise, condolence money would also be given in cash in a white envelope,” he said.

Mr Liew’s view reflects a broader reality: Even as digital payments grow, cash continues to play an important role in certain situations.

Monetary Authority of Singapore (MAS) deputy chairman Chee Hong Tat said in Parliament on Feb 26 that Singapore wants to build a “cash-lite” society, not a cashless one, even as digital payments gain popularity.

This includes the possibility of making cash acceptance mandatory by law, though the impact on small businesses would have to be carefully considered.

Singaporeans and permanent residents aged 18 to 34 are among the heaviest users of digital payments, driven largely by convenience, as well as incentives such as cashback and rewards.

About 70 per cent of those aged 18 to 24 look out for cashback or discounts when deciding how to pay, with the proportion rising to 81 per cent among those aged 25 to 34.

Younger people adopt more digital payment methods but still predominantly use cards and PayNow.

*Figures do not add up to 100% as respondents use multiple payment methods.

Similarly, about 65 per cent of those aged 18 to 24 prioritise rewards such as points or air miles, rising to 76 per cent among those aged 25 to 34.

Digital payment usage has risen sharply among younger adults since the pandemic, with 88 per cent of those aged 18 to 24 and 84 per cent of those aged 25 to 34 saying they have increased their use of such payment methods since 2021. Convenience and promotional incentives are cited as the main reasons.

Compared with older age groups, younger Singaporeans and permanent residents show a stronger tilt towards e-wallets and mobile wallets, while older Singaporeans and permanent residents are more likely to rely on credit or debit cards and cash.

Younger consumers also show stronger engagement with e-wallet providers such as DBS PayLah, GrabPay and ShopeePay, as well as rewards apps such as ShopBack.

Ms Myra Kheng said she tends to use ShopeePay on Shopee, especially when there are additional discounts tied to the payment method.

“There haven’t been many ShopeePay coupons lately, so I’ve stopped using it. I would consider using it again if there are more attractive vouchers,” said the 31-year-old corporate communications manager.

Ms Kheng also uses multi-currency e-wallet YouTrip when travelling, particularly for medium-sized purchases of about $200 to $500 overseas, as it helps her avoid credit card foreign exchange charges.

“The exchange rates are more attractive than changing cash at money changers, even when I pay in Singapore dollars via YouTrip rather than converting currencies within the app,” she said.

Buy now, pay later (BNPL) services are also popular among younger adults in Singapore, with awareness and usage highest among those aged 18 to 34, and falling sharply among those aged 55 and above.

Among users, the average BNPL transaction size is around $200 to $220 for those aged 18 to 34. Consumers in this age group also use BNPL not just for bigger-ticket items, but also for everyday purchases such as food and fashion.

For now, cryptocurrencies remain unpopular as a payment method, accounting for just 1 per cent of transactions for big-ticket items.

Mr Amirthan Venkat is among the few who have used cryptocurrencies for purchases.

He said he used the stablecoin USDC to buy a Solana Seeker smartphone, as the seller accepted it and he already had the funds in his cryptocurrency wallet.

“It was the simplest way to pay, as I did not have to convert my USDC into fiat, wait for a bank transfer or use my card,” said the 29-year-old Master of Business Administration (MBA) student.

But Mr Amirthan noted that such payments carry risks.

“The main downside was having to be really careful with the wallet address, because once you send crypto, transactions cannot be reversed if an error is made.”

He said he was also more conscious than usual about trust, since crypto users do not get the same protection they normally would with a card payment.

Besides convenience, factors such as promotions and rewards are also driving the shift towards digital payments across all age groups.

Singaporeans and permanent residents split between chasing rewards and keeping it simple

From online shopping to groceries and public transport, credit cards dominate – thanks to their ease of use and robust rewards ecosystem.

Yet, this convenience comes at a cost.

Merchants spend an average of 1.5 per cent to 3 per cent of each transaction on payment processing fees. These fees help fund the promotions, cashback and reward programmes that make digital payments attractive to consumers.

Card rewards are funded by merchant fees, PayNow skips them entirely.

While such incentives encourage spending and adoption, they also add to merchants’ operating costs, which may be reflected in higher prices or tighter margins. In this way, the convenience and perks of digital payments come with a hidden financial trade-off that both businesses and consumers indirectly bear.

For PayNow, the fees are much lower, though the payment method does not offer promotions, cashback or rewards.

Major retail banks currently waive transaction fees on payments received from end-consumers, charging only a nominal fee when merchants use extra services, such as notifications for incoming funds.

More than 90 per cent of Singapore residents and businesses use PayNow, according to data from The Association of Banks in Singapore (ABS), an MAS spokesperson said. ABS owns the PayNow scheme.

Ms Ng Lee Peng, head of digital business Singapore at OCBC Bank, said that digital transactions continue to see strong momentum, with PayNow increasingly becoming a preferred method for fund transfers.

In 2025, the number of transactions made by OCBC customers grew more than 30 per cent year on year, while the total value of PayNow transactions made by OCBC customers rose nearly 50 per cent year on year.

“Customers are also using PayNow to transfer higher‑value amounts, reflecting growing confidence in fast and secure digital payment options,” said Ms Ng.