Cashless Society – What digital payments mean for our kids?

digital payments

During the 2017 National Day Rally Speech, our Prime Minister mentioned that Singapore is progressing towards a Smart Nation where the first step is to become a cashless society like China. Following this, POSB launched a Smart Buddy Programme* . This programme enables students to make use of smartwatches to pay digitally in school. Parents are also able to download an application to monitor and track their kid’s spending. It is beneficial for Singapore to be forward-looking. However, is it necessary to expose our kids to digital modes of payments at such a tender age?

Here are some advantages and disadvantages of exposing kids to digital payments at a young age:

Advantages of digital payments to kids:

1.Early exposure to the future

With the way the government is trying to encourage digital payments in line with global trends, it is inevitable that digital payments will become the norm in the near future. Furthermore, digital payments may become the only form of transaction in the future. Hence, it may be better to expose kids to digital payments at a young age to prepare them for the future.

2.Convenience for parents

Also with digital payments, kids no longer have to carry cash with them anymore. Hence, parents no longer have to worry about their children losing money. Moreover, parents are also able to track their kid’s spending. Through this way, they can find out whether their kids are spending money on things that may not be needed.

Disadvantages of digital payments to kids:

According to a recent survey done by MasterCard, it was discovered that there was a decline in financial literacy among consumers in Singapore. (1) The rise of digital payments may be making this problem worse as it is now harder to teach kids about financial literacy.

1.Value of money

Cash is a tangible item that can be felt with our hands. With cash, we can see the transaction that goes on. By being able to see the actual purchase, it teaches one that we have to exchange some money for the things we are getting. Kids will then be better able to grasp the concept of money. However, with digital payments, payments are virtual and quickly made thereby making it harder to educate kids about the value of money.

2.Importance of saving

In the past, our parents used to teach us the value of saving by giving us a piggy bank to store our leftover cash. With the money we filled up in our piggy banks, we were then able to buy the things we wanted. This taught us the importance of saving, whereby we should work for what we want. However, with digital payments, it gives our kids lesser exposure to cash, making it harder for them to realise the importance of saving.

No doubt in the digital age today, it is vital that we are forward-looking and keep up with the rapidly changing world. By going cashless, it is the first step for Singapore to move towards being a Smart Nation. However, in the process of being technologically advanced, are we doing it at the expense of our kids?

*https://www.dbs.com/newsroom/Worlds_first_in_school_wearable_tech_savings_and_payments_programme_POSB_Smart_Buddy_launches_in_19_schools

 

Source: (1) https://www.todayonline.com/singapore/singapore-sees-drop-financial-literacy-mastercard-survey

 

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