Disclaimer: Unless otherwise stated, any opinions expressed below belong solely to the author.
Given the number of various support schemes provided by the government in Singapore, one might question whether there aren’t too many of them and if it wouldn’t be simpler to simply disburse one cash payment to every eligible person.
After all, it’s not like the government isn’t doing that already, depositing funds directly for GST Vouchers, Assurance Package payments and cost-of-living support, regularly appearing in recent years.
So why bother with CDC Vouchers, which require an entire digital infrastructure to allow their issuance and redemption? Wouldn’t a simple bank transfer be better?
Cash is not king
At least not for everybody, and certainly not for the government, which is using its power to direct the money to specific parts of the economy.
Cash is liquid, and you can do whatever you want with it, including going for a nice day trip to JB to spend it there instead of Singapore. You may also use it for online shopping on one of the many ecommerce platforms, with most of the funds being sent to sellers in China or other countries.
This sees Singapore dollars exiting the domestic economy, benefiting others instead.
More prudent Singaporeans could opt to save it instead, which isn’t terrible in itself, but does keep the funds out of circulation.
Finally, the more reckless consumers could simply waste it on more “sinful” pleasures, still ending up short of money for daily necessities.
The voucher format allows the government to set strict rules on their use: with 50% allocated to shopping in supermarkets and another half to hawkers and smaller, heartland merchants.
This ensures that this pool of money is spent in the most beneficial way and provides the authorities with data on how the money is spent and where.
There is, however, one other purpose they have served very well since their launch six years ago, which is not spoken of.
Going digital—and staying there
CDC Vouchers originated as a COVID-19-era relief scheme, originally issued on paper and directed to the poorest households.
With the pandemic dragging on throughout 2021, the scheme was ultimately expanded to all citizen households by the end of the year and went digital with the launch of the RedeemSG app. Merchants could use it to accept the vouchers by scanning digital QR codes on customers’ phones, instead of dealing with paper.
In parallel, the government launched the Hawkers Go Digital scheme in Jun 2020, with generous subsidies and transaction fee waivers, which were meant to help hawkers adopt digital payments and reduce the risk of spreading the virus.
It was also a good opportunity to prod them to adopt mobile payments, which have become a staple in many countries around the world (most notably China, through its giant superapp WeChat).
The final waiver of the 0.5% fees ended just recently on Jun 30, 2026, after several past extensions. This means that hawkers are now going to have to bear the cost themselves, which might mean that some of them may prefer to return to cash-only payments.
But this is where the CDC scheme comes in.
Throughout the push for digital payments, the critics lamented that many elderly sellers might be struggling with the transition, not being very tech-savvy. What’s more, a skill once developed needs to be kept in use before it falls out of favour. Old habits die hard, after all.
Well, while we might see some return to cash, there is no returning to paper for CDC vouchers.
And because of the scale of the program, currently exceeding S$1 billion annually, hawkers have a strong incentive to keep their RedeemSG app to accept voucher QR codes.
In other words: there’s no exit from the QR era.
Of course, using the CDC app doesn’t force merchants to accept all digital payments, but since they still have to deal with QR codes to accept the vouchers, it provides very useful stickiness, which is going to keep most of them on the digital train.
- Read other articles we’ve written on Singaporean businesses here.
Featured Image Credit: CDC/ depositphotos
