Recent data suggests small and medium-sized enterprises (SMEs), which make up the backbone of Singapore’s economy, are increasingly turning to digital transactions to collect money from their customers.
DBS has seen a 70% increase in digital transactions from its SME customers and 25% increase in transaction value since the bank launched DBS MAX, Singapore’s first mobile-based QR payment collection solution in Singapore four months ago.
Adoption of DBS MAX has been steadily expanding with close to 2,000 merchants and 3,000 over outlets across Singapore. DBS MAX has gained traction among the bank’s SME customers in the F&B and retail sectors. Collections at cashiers or outlets can be enabled and maintained on the DBS IDEAL website. In addition to store-front collections, DBS MAX is also replacing cash in B2B and B2C last mile deliveries.
In 2015, it was estimated that the cost of processing cash is about S$2 billion (US$1.46 billion) a year, or 0.5% of Singapore’s GDP. This is the amount that businesses collectively, especially small businesses, can potentially save.
In the first four months of 2019, overall cash transactions for SME customers using DBS MAX have significantly decreased by about half. This co-relates to the over four in five Singaporeans who are already using some form of e-payment, as digitalization brings about more ease and convenience. This trend is set to continue with the increase in digital payments collections solutions targeted directly at SMEs such as DBS MAX.
Jasmin Ng, group head of cash product management at DBS Bank, says, “Cashflow is the lifeblood of SMEs. One of the key challenges for SMEs is the ability to achieve sufficient liquidity while balancing expenses. As a bank, we are constantly looking at how we can innovate to help SMEs optimise their working capital, while streamlining their collections and payables process.”
With continued decline of the physical wallet and as Asian consumers become more sophisticated, DBS expects that more than three in five retail SMEs will sign up for the DBS MAX solution in the next 12 months.