Mobile Payment Adoption and Challenges

This assignment delves into the growing phenomenon of mobile payment adoption, particularly focusing on developing countries. It examines the key drivers influencing consumer acceptance of these services, such as trust, convenience, and security. Furthermore, it highlights the challenges associated with widespread mobile payment adoption, including infrastructure limitations, regulatory hurdles, and user awareness issues. The analysis draws upon a range of scholarly articles and research reports to provide a comprehensive understanding of this evolving landscape.

Running head: SINGAPORE GOING CASHLESS
Can Singapore Catch Up in the Race to go Cashless?
Name of the student:
Name of the university:
Author note:

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SINGAPORE GOING CASHLESS
Abstract
The paper covers a very important literature review on cashless payment system in Singapore.
Throughout the paper it tries to cover the pros and cons of using cashless system in Singapore.
The paper has supported its discussion from few evidences on other countries as well such as
China and Nigeria. China is the most successful countries in cashless system mainly because of
the huge numbers of internet users and the success of Alipay. The paper has though shown that
Nigeria is facing certain challenges in terms of the support, which is inadequately being driven
by the different stakeholders in the country. However, the paper also confirms that Nigeria has
aimed to attain a cashless status in order to be in the list of top 20 economies in the world by
2020. The paper at the end leaves few areas for further research.

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SINGAPORE GOING CASHLESS
Table of Contents
Literature review:.............................................................................................................................3
Study background-.......................................................................................................................3
Obstacles behind a slow take-up rate of cashless payments in Singapore-.................................3
Influencing factors for the adoption of cashless payments-........................................................5
Benefits from Singapore going cashless-....................................................................................7
Learning from countries having successful take-up rates in cashless payments-......................10
Discussion-....................................................................................................................................12
Implications-..................................................................................................................................12
Bibliography..................................................................................................................................13

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SINGAPORE GOING CASHLESS
Literature review:
Study background-
Cashless payment through mobile does not mean a complete ending of physical mode of
payment. However, it rather means a reduction in the physical mode of payment. Singapore is a
highly active country when it comes to technology and innovation; however, it has somehow not
shown the thirst which was required for considering the adoption of mobile payment1. On the
other hand, China is a leading country in terms of using the cashless payment2. Interestingly,
other developing nations such as Nigeria have shown their interest in the cashless payment3. The
main purpose of this assignment is to analyze the opportunities and the challenges, which are
there in the cashless payment system. The literature review tries to show the prospect of cashless
payment in Singapore.
Obstacles behind a slow take-up rate of cashless payments in Singapore-
There are some reasons, which have discouraged the country from going cashless. Some
of the reasons that might be the causes behind a slow approach towards a cashless payment are
as follows4:
 Limited trust on the electronic devices that facilitates cashless payment
1 "Going Cashless In Singapore Challenging But Not Impossible". 2017. The New Paper.
http://www.tnp.sg/news/singapore/going-cashless-singapore-challenging-not-impossible.
2 Kajdi, László. "A Western Diet with Chinese Spices–The Specificities of Payments in China." Financial and
Economic Review 16, no. Sepcial Issue (2017): 140-169.
3 Yaqub, J. O., H. T. Bello, I. A. Adenuga, and M. O. Ogundeji. "The cashless policy in Nigeria: prospects and
challenges." International Journal of Humanities and Social Science 3, no. 3 (2013): 200-212.
4 Prakasam, Silvester. "Evolution of E-payments in Public Transport—Singapore’s Experience." JOURNEYS 3
(2009): 53-61.

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SINGAPORE GOING CASHLESS
 Absence of a regulatory framework, which could enhance the payment security and could
innovate various things to make it more secured & user-friendly
 Absence of systems that are partially interoperable
One of the causes that have thus far prevented Singapore from going cashless is the fear to use
the service5. Customers have fear in them about the payment security. They rely much on the
traditional format of payment such as by credit card. The reason is very well supported in a
chosen article "Dynamics between the trust transfer process and intention to use mobile
payment services: A cross-environment perspective." The article has found two variables such
as initial trust and perception of risk in customers, which influence their behavior towards the
mobile payment. If they have initially developed trust for the cashless system, they will think of
taking the advantages of the cashless system. Additionally, if they have sensed risk in the
cashless method they will certainly keep themselves away from the system6.
The facts that are preventing Singapore from going cashless can also be understood from
the example of Nigeria, which is a cash-based economy. The country has prospects for the
cashless system, which is also evident in the recent steps of the Central Bank of Nigeria. The
Central Bank of Nigeria has implemented the cashless system as they have realized the urgency
to balance the rising demand. However, it is still challenging in the country because of following
reasons7:
5 Jumoke, Soyemi, Soyemi Babajide Olugbenga, and Hammed Mudasiru. "Nigeria Cashless Culture: The Open
Issues." Int. j. eng. sci 4, no. 4 (2015): 51-56.
6 Lu, Yaobin, Shuiqing Yang, Patrick YK Chau, and Yuzhi Cao. "Dynamics between the trust transfer process and
intention to use mobile payment services: A cross-environment perspective." Information & Management 48, no. 8
(2011): 393-403.
7 Yaqub, J. O., H. T. Bello, I. A. Adenuga, and M. O. Ogundeji. "The cashless policy in Nigeria: prospects and
challenges." International Journal of Humanities and Social Science 3, no. 3 (2013): 200-212.

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SINGAPORE GOING CASHLESS
 Lack of acquaintance with the benefits of cashless payment system
 Associated risks8
 Insufficient trained personnel in major organizations
 Tendency to be reliant with the existing system
 People may have resistive nature in them to the new payment method
The similar facts can also be supported from the example of cashless system in India. The
government has shown their utter interest towards a cashless economy; however, challenges are
many too. The country has a very large population of it living in villages in the different states.
They have their tendency to remain addicted with the traditional system of cash payment, which
according to them is more secured. They have their perception to be resistive towards any
innovative system. The fear to move into a new system of any domain has created enough doubts
for the success of cashless system in the country9.
Influencing factors for the adoption of cashless payments-
The biggest influencing factor for a cashless payment in Singapore can be its prospects,
which it has already delivered to other countries such as China10. In China, customers have
shown their utter trust on the cashless system. It has been observed from the success of mobile
payment in China that the platform should offer something different to what has already been
offered by other modes of payment like credit card. Customers will not like going through the
8 Oladejo, Morufu, and Taibat Akanbi. "Bankers perceptions of electronic banking in Nigeria: A review of post
consolidation experience." Research Journal of Finance and Accounting 3, no. 2 (2012): 1-11.
9 Warke, Prashant S., and Prajakta R. Patil. "An Empirical Study on Challenges & Opportunities in Indian Economy
towards Cashless Enigma." International Journal of Advanced Electronics and Communication Systems 6, no. 6
(2017).
10 Nordio, Margherita. "Underground banking and money laundering: focus on China." (2016).

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SINGAPORE GOING CASHLESS
same interface as they get during the payment through credit or debit cards. They will rather
want a different interface, which could excite their interest level. Indeed, the stakeholders are
required to integrate with the existing value chain but need to offer a distinct platform11.
It has further been observed that there is a need to build up an ecosystem where a co-
operative operation will exist12. This can be understood from the example of Alipay in China,
which has provided an environment where key organizations can come across and initiate the
business of partnership to facilitate the success of cashless system in the country. The similar
thing has happened in the country as there has been a phenomenal relationship in between the
banks and the Alipay. Alipay is a renowned name in the country. It has a large base of followers
in the country. It has already operated with a success in the e-payment mode. The status of such
kind has helped Alipay to successfully migrate into the mobile payment. Nevertheless, the
success has also conveyed a message that there can be the creation of a real trust for mobile
payment if the country has online giant like Alipay13.
It has also been believed that to have an effective development of the national economy,
an efficient payment system is immensely required14. Payment system is like other infrastructure
such as telecommunications, transportation infrastructure and electrical power. It needs to be
taken under a continuous development program in order to give it the most secured way.
Interestingly, some research works have shown that an increase of 10% in the local payment
11 Zhong, Junying, Amandeep Dhir, Marko Nieminen, Matti Hämäläinen, and Juha Laine. "Exploring consumer
adoption of mobile payments in China." In Proceedings of International Conference on Making Sense of
Converging Media, p. 318. ACM, 2013.
12 Hedman, Jonas, and Stefan Henningsson. "The new normal: Market cooperation in the mobile payments
ecosystem." Electronic Commerce Research and Applications 14, no. 5 (2015): 305-318.
13 Guo, Jie, Jie Guo, Harry Bouwman, and Harry Bouwman. "An ecosystem view on third party mobile payment
providers: a case study of Alipay wallet." info 18, no. 5 (2016): 56-78.
14 Chavan, Jayshree. "Internet banking-Benefits and challenges in an emerging economy." International Journal of
Research in Business Management 1, no. 1 (2013): 19-26.

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SINGAPORE GOING CASHLESS
system contributes in an increment of 1% in the GDP per capita15. An efficient payment system
will depend to a least degree on the cash system of transaction and henceforth will provide the
following benefits16:
 This will increase the velocity of money, which is very important for promoting an
economic growth
 This will reduce the volume of cash that have been kept outside the bank
 This will bring flexibility in the banking operation and will enable them to offer the most
attractive rates to the deprived sectors of the economy
 This will also reduce the corruption
 This will also reduce the overall bank charges
Benefits from Singapore going cashless-
The cashless system if it gets implemented in Singapore, this will benefit the country in
many ways. This will not only benefit the common public but the public and the private
companies will also get benefitted. Following are the list of bodies that will be benefitted from
Singapore going cashless:
Public and the private sectors-
The private and public companies will be free from manual works of reconciling the
cash amounts. This is because there will be a reduced flow of cash amounts. The transaction will
be significantly replaced by the cashless payment. Surprisingly, the local government has to
15 Odior, Ernest Simeon, and Fadiya Bamidele Banuso. "Cashless banking in Nigeria: Challenges, benefits and
policy implications." European Scientific Journal, ESJ 8, no. 12 (2012).
16 Odior, Ernest Simeon, and Fadiya Bamidele Banuso. "Cashless banking in Nigeria: Challenges, benefits and
policy implications." European Scientific Journal, ESJ 8, no. 12 (2012).

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SINGAPORE GOING CASHLESS
spend a huge amount of money to secure the cash amounts17. In Ireland for example, it costs
around 1.4% of the entire Gross National Product in protecting and administrating the cash and
cheques both during and after the production18. In Singapore, it costs around s$1.50 for the
processing of each cheque. Going cashless would simply reduce such expenditures. These are the
few ways in which the private and the public companies in Singapore are going to be benefited
from Singapore becoming a cashless nation19.
Legal sectors-
The implementation of cashless payment in Singapore will provide relief to the legal
proceedings. There is always a threat of cash money being looted during a trip to somewhere.
This can even happen even under tight security20. The implementation of cashless payment will
therefore mean a reduction in cash payments. This will further mean that more and more
transaction will then be done electronically. Consequently, there will be a reduction in the crime
rates. Henceforth, this will be a relieving move for the local police. They will then get reduced
numbers of money theft cases. In 2014, a study was conducted in Missouri in the United States
on the crime cases after the implementation of electronic transfer system. The study had then
found a reduction of 10% in the burglary and assault cases21.
17 Reaves, Bradley, Nolen Scaife, Adam M. Bates, Patrick Traynor, and Kevin RB Butler. "Mo (bile) Money, Mo
(bile) Problems: Analysis of Branchless Banking Applications in the Developing World." In USENIX Security
Symposium, pp. 17-32. 2015.
18 challenge.gov.sg. 2017. Challenge.Gov.Sg. https://www.challenge.gov.sg/print/cover-story/the-benefits-of-going-
cashless.
19 challenge.gov.sg. 2017. Challenge.Gov.Sg. https://www.challenge.gov.sg/print/cover-story/the-benefits-of-going-
cashless.
20 Aluko, Ayodeji, and Mahmood Bagheri. "The impact of money laundering on economic and financial stability and
on political development in developing countries: The case of Nigeria." Journal of Money Laundering Control 15,
no. 4 (2012): 442-457.
21 challenge.gov.sg. 2017. Challenge.Gov.Sg. https://www.challenge.gov.sg/print/cover-story/the-benefits-of-going-
cashless.

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SINGAPORE GOING CASHLESS
In Singapore, there will be no such requirement for the hawkers, consumers and the
businessman to carry loads of cash amounts. Therefore, the chances of robbery will be reduced.
However, the electronic payment is also not entirely secured. There are scammers who do
fraudulent activities to theft the money online. In such situations, cyber security measures will be
required to impose to protect such fraudulent practices22. However, this is understandable that in
such cases things will be much controlled because it will just require a cyber security system to
be installed. Along with that, this will also require a continuous monitoring from the experts to
check whether there is any hacking process on the system23.
Less cash means more data-
Electronic payments will provide an improved data on the public activities. This will help
in identifying the commercial activity. This will also help in improving the urban planning for
transportation, housing and energy management as it is confirmed by a research from
“MasterCard found”24. Approximately 66% percent of the workers in Singapore receive their
payment made through electronic modes. However, many foreign workers those who are
working in the marine and the construction sectors still prefer to be paid in cash. If they also
transferred to an electronic mode of payment, this will help the country get important data on
those workers25.
Learning from countries having successful take-up rates in cashless payments-
22 Kshetri, Nir. "Cybercrime and cyber-security issues associated with China: some economic and institutional
considerations." Electronic Commerce Research 13, no. 1 (2013): 41-69.
23 Richet, Jean-Loup. "Laundering Money Online: a review of cybercriminals methods." arXiv preprint
arXiv:1310.2368 (2013).
24 challenge.gov.sg. 2017. Challenge.Gov.Sg. https://www.challenge.gov.sg/print/cover-story/the-benefits-of-going-
cashless.
25 challenge.gov.sg. 2017. Challenge.Gov.Sg. https://www.challenge.gov.sg/print/cover-story/the-benefits-of-going-
cashless.

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SINGAPORE GOING CASHLESS
China in particular has been benefitted by the mobile payment. The implementation of
the mobile payment is because of their reform strategy, which they had earlier started in the year
1978. The mentioned reform strategy did encourage the country to switch over to an open
economy. Such a move had flourished many much successes in the past. It continued to do the
same. This time the country has shown potentials by going cashless. The climbing progress in
technology such as the 3G & the 4G network and the incrementing usage of mobile phones have
collectively encouraged the initiation of mobile payment in China26. The payment system is very
secured, fast and reliable. The majority of people who use internet in China prefer shopping
through online platform. There are various online platforms in the country such as Alipay,
Tenpay, Union Pay, YeePay, China PnR and others. Alipay in particular has further the success
of mobile payment in the country. The system has provided a more secured platform to the
Chinese people. This is also believed that payment through mobile is never safe. In such
situations, it is really difficult to trust on such platforms. However, Alipay provides the safest
platform for online transactions. It does so through two kinds of services such as escrow that
helps in absolute safety during the transaction and the flexible payment options that allow
freedom to select the payment options. The technical advancement of Alipay has furthered the
success of cashless payment in China27.
Cashless payment system was implemented in developing countries like Nigeria. It was
done to fulfill the vision, which states that Nigeria want to be within the top 20 countries by
2020. Consequently, it was believed that cashless system is necessary to be an efficient player of
economy. However, the different stakeholders are confused. They are divided on the issues,
26 Schneider, A., and C. M. Mertes. "Expansion and growth in Chinese cities, 1978–2010." Environmental Research
Letters 9, no. 2 (2014): 024008.
27 Liu, Rongbing. "The Role of Alipay in China." Nijmegen. Radboud University (2015).

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SINGAPORE GOING CASHLESS
which are probable with the cashless system. It is therefore necessary that the commercial banks
and the other stakeholders take a collaborative step towards the cashless payment. However, they
have indeed realized the importance of cashless system for the betterment of existing economy in
the country. The thought process in the country might help it succeed in progressing with the
cashless payment system28. Despite the challenges in the country, it is poised to get the benefits
of cashless payment system. They have felt the necessity of cashless system in fulfilling the
vision 2020. They have realized that in order to be one of 20 top economic countries by 2020, it
is imperative to adopt the cashless system. There are requirements to resolve the issues such as
money laundering, inflation, tax evasion, efficiency in financial statement reporting and poor
payment balance. Indeed, cashless system can effectively help in controlling the highlighted
issues29.
Discussion-
The above literature review can be summarized into few findings. It can be summarized
into little strength such as the cashless payment system has the potentials to resolve critical
issues like money laundering, tax evasion, inflation and inefficient handling of financial
statement reporting. However, the expected benefits may cause some adverse reactions as well.
The cashless payment system is also not very secured. Fraudsters can act smart and hack the
system to get an access to the payment option. It is rather a challenging situation because there
will be no clue of where the money has gone. Despite the challenges it has been viewed as a
28 Achor, Princewell N., and Anuforo Robert. "Shifting policy paradigm from cash-based economy to cashless
economy: The Nigeria experience." Afro-Asian Journal of Social Sciences 4, no. 4 (2013).
29 Emengini, Steve Emeka. "Cashless economy and financial statement reporting in Nigeria." European Journal of
Accounting Auditing and Finance Research 2, no. 3 (2014): 1-9.

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SINGAPORE GOING CASHLESS
potential option to further the economy of the respective country. China has already been
benefitted largely because of the internet use in the country and the success of Alipay.
Implications-
Further research may come from the following areas:
 Hacking cases during the cash transaction through online
 Rate of reduction in the identifies issues such as money laundering
 Change in economy after implementing the cashless payment system in Singapore

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SINGAPORE GOING CASHLESS
Bibliography
Achor, Princewell N., and Anuforo Robert. "Shifting policy paradigm from cash-based economy
to cashless economy: The Nigeria experience." Afro-Asian Journal of Social Sciences 4, no. 4
(2013).
Aluko, Ayodeji, and Mahmood Bagheri. "The impact of money laundering on economic and
financial stability and on political development in developing countries: The case of
Nigeria." Journal of Money Laundering Control 15, no. 4 (2012): 442-457.
Emengini, Steve Emeka. "Cashless economy and financial statement reporting in
Nigeria." European Journal of Accounting Auditing and Finance Research 2, no. 3 (2014): 1-9.
challenge.gov.sg. 2017. Challenge.Gov.Sg. https://www.challenge.gov.sg/print/cover-story/the-
benefits-of-going-cashless.
Chavan, Jayshree. "Internet banking-Benefits and challenges in an emerging
economy." International Journal of Research in Business Management 1, no. 1 (2013): 19-26.
"Going Cashless In Singapore Challenging But Not Impossible". 2017. The New Paper.
http://www.tnp.sg/news/singapore/going-cashless-singapore-challenging-not-impossible.
Guo, Jie, Jie Guo, Harry Bouwman, and Harry Bouwman. "An ecosystem view on third party
mobile payment providers: a case study of Alipay wallet." info 18, no. 5 (2016): 56-78.
Hedman, Jonas, and Stefan Henningsson. "The new normal: Market cooperation in the mobile
payments ecosystem." Electronic Commerce Research and Applications 14, no. 5 (2015): 305-
318.

14
SINGAPORE GOING CASHLESS
Jumoke, Soyemi, Soyemi Babajide Olugbenga, and Hammed Mudasiru. "Nigeria Cashless
Culture: The Open Issues." Int. j. eng. sci 4, no. 4 (2015): 51-56.
Kajdi, László. "A Western Diet with Chinese Spices–The Specificities of Payments in
China." Financial and Economic Review 16, no. Sepcial Issue (2017): 140-169.
Kshetri, Nir. "Cybercrime and cyber-security issues associated with China: some economic and
institutional considerations." Electronic Commerce Research 13, no. 1 (2013): 41-69.
Liu, Rongbing. "The Role of Alipay in China." Nijmegen. Radboud University (2015).
Lu, Yaobin, Shuiqing Yang, Patrick YK Chau, and Yuzhi Cao. "Dynamics between the trust
transfer process and intention to use mobile payment services: A cross-environment
perspective." Information & Management 48, no. 8 (2011): 393-403.
Nordio, Margherita. "Underground banking and money laundering: focus on China." (2016).
Odior, Ernest Simeon, and Fadiya Bamidele Banuso. "Cashless banking in Nigeria: Challenges,
benefits and policy implications." European Scientific Journal, ESJ 8, no. 12 (2012).
Oladejo, Morufu, and Taibat Akanbi. "Bankers perceptions of electronic banking in Nigeria: A
review of post consolidation experience." Research Journal of Finance and Accounting 3, no. 2
(2012): 1-11.
Oliveira, Tiago, Manoj Thomas, Goncalo Baptista, and Filipe Campos. "Mobile payment:
Understanding the determinants of customer adoption and intention to recommend the
technology." Computers in Human Behavior 61 (2016): 404-414.

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SINGAPORE GOING CASHLESS
Prakasam, Silvester. "Evolution of E-payments in Public Transport—Singapore’s
Experience." JOURNEYS 3 (2009): 53-61.
Reaves, Bradley, Nolen Scaife, Adam M. Bates, Patrick Traynor, and Kevin RB Butler. "Mo
(bile) Money, Mo (bile) Problems: Analysis of Branchless Banking Applications in the
Developing World." In USENIX Security Symposium, pp. 17-32. 2015.
Richet, Jean-Loup. "Laundering Money Online: a review of cybercriminals methods." arXiv
preprint arXiv:1310.2368 (2013).
Schneider, A., and C. M. Mertes. "Expansion and growth in Chinese cities, 1978–
2010." Environmental Research Letters 9, no. 2 (2014): 024008.
The New Paper. (2017). Going cashless in Singapore challenging but not impossible. [online]
Available at: http://www.tnp.sg/news/singapore/going-cashless-singapore-challenging-not-
impossible [Accessed 6 Nov. 2017].
Warke, Prashant S., and Prajakta R. Patil. "An Empirical Study on Challenges & Opportunities
in Indian Economy towards Cashless Enigma." International Journal of Advanced Electronics
and Communication Systems 6, no. 6 (2017).
Yang, Shuiqing, Yaobin Lu, Sumeet Gupta, Yuzhi Cao, and Rui Zhang. "Mobile payment
services adoption across time: An empirical study of the effects of behavioral beliefs, social
influences, and personal traits." Computers in Human Behavior28, no. 1 (2012): 129-142.
Yaqub, J. O., H. T. Bello, I. A. Adenuga, and M. O. Ogundeji. "The cashless policy in Nigeria:
prospects and challenges." International Journal of Humanities and Social Science 3, no. 3
(2013): 200-212.

16
SINGAPORE GOING CASHLESS
Zhong, Junying, Amandeep Dhir, Marko Nieminen, Matti Hämäläinen, and Juha Laine.
"Exploring consumer adoption of mobile payments in China." In Proceedings of International
Conference on Making Sense of Converging Media, p. 318. ACM, 2013.