Taxi drivers are the best thermometers to gauge the acceptance of new forms of monies, especially those cashless and digital forms. As such, my quote in The Straits Times today about the DASH app by Standard Chartered Bank and Singtel circled around my payment experience with taxi drivers.
Credit cards, NETS and the EZ Link cards payments are currently the cashless payments acceptable in taxis yet they have not reach 10% of cash transacted each day. From this, it is quite easy to say that DASH will die a quick death, despite the big flashy launch.
The main reason for this is that the benefits of cash still outweighs that of using digital payments like DASH.
For the taxi driver, it is still better to have cash in hand. With that cash, the driver is able to use it to pay some of the immediate daily expenditure. Payment by non-cash medium means the taxi driver will have to wait a few days for the money to go to the driver will have to spend time to go to the bank to withdraw cash.
For the consumers, payment through cashless means will be that only as a last resort when their wallets do not carry enough to pay or they can't find a ATM near their pick up or drop off point.
As it comes to cashless payments, there are third parties involve and they too need to earn from the transaction. Currently, when you pay with cards in the taxi, the taxi companies pass the administrative charge to the customer.
For credit cards, the customer will be charged an additional 10% of the total meter and that 10% is subjected to the prevailing GST. For payment via NETs, a local debit card payment solution, it is an additional $0.30 and GST on that.
Given that the consumer is being punished by using card payments, won't it make sense to pay by cash?
VISA decided that customers should not be punished for using their cards and have since pulled out as a payment choice for taxis.
Standard Chartered and Singtel could argue that DASH will become very popular when there are many establishment accept it as payment.
In reality and experience from my last job working with merchants, any new form of payment method can be costly and turn into a white elephant despite claims that there are many users of it.
One example is ePins, an alternative to NETS that allows debit payment from foreign bank. One merchant I knew started it but at the end of three months returned the payment terminal as no one was using it.
DASH may have an advantage that it is mobile to mobile transaction so there is no need to rent any terminals. The merchants will then ask if Singtel will provide them with a free smartphone?
Even if Singtel do provide a free smartphone, merchants will also be concern if the cashiers will pocket the transaction to their own phone rather than the designated venue mobile device.
Cash is still king. I wish DASH Godspeed but I am still pessimistic of its survival beyond a year.