Singapore touts ‘greener’ digital monetary gifts this Lunar New Year
Singapore is urging citizens to go green and tap digital payment platforms when they dish out monetary gifts to celebrate the upcoming Lunar New Year. This will help reduce carbon emissions currently estimated to be some 330 tonnes as a result of the annual customary practice.
The Monetary Authority of Singapore (MAS) on Monday said the use of e-hongbaos, apart from being more environmentally friendly, also would facilitate remote gifting amidst safe distancing measures in the ongoing COVID-19 pandemic. In addition, e-gifters would not need to join the queue for physical bank notes.
MAS’ assistant managing director for finance, risk, and currency, Bernard Wee, noted that the adoption of digital payments grew significantly this past year and proved more convenient than cash. “The coming Lunar New Year offers an opportunity for us to build on this momentum to spread the benefits of e-gifting, and to forge new traditions with our families and friends,” Wee said.
“E- gifting helps to reduce the queues at banks and also helps to reduce the carbon emissions generated by the production of new notes for each Lunar New Year, estimated to be about 330 tonnes currently,” he said. “This is equivalent to emissions from charging 5.7 million smartphones or one smartphone for every Singaporean resident for five days.”
MAS added that handing out e-hongbaos would reduce the need to print, and waste, new notes since these typically were returned by the public to banks after each Lunar New Year.
The industry regulator called on fintech companies to develop and offer various e-gifting applications and services to support the move. It added that the Association of Banks in Singapore would actively promote e-gifting this festive season.
In China, messaging platforms such as WeChat have facilitated and seen increasing adoption of e-hongbaos. Tencent in 2019 said 823 million of its WeChat users sent and received the digital monetary gifts in the first six days of the Lunar New Year, which was up 7% from the previous year.
MAS last November said eligible non-bank financial institutions in Singapore soon would have direct access to the country’s retail payment platforms, PayNow and FAST. This would enable e-wallet users to make funds transfers between bank accounts and across different e-wallets. Currently, e-wallets can be topped up only via credit or debit cards and funds cannot be transferred between e-wallets.
To plug this gap, MAS said a new API (application programming interface) payment gateway had been developed under guidelines from the Singapore Clearing House Association (SCHA) and Association of Banks in Singapore (ABS), both of which govern FAST and PayNow, respectively. The API would better fit the technology architecture of banks and non-bank financial institutions, MAS said, adding that direct access to the payment platforms would be effective from February 2021.