Singapore's Food Hawkers Go Digital

Singapore officials trying to digitize the economy are targeting a tricky group of holdouts: elderly vendors who run the country’s famed hawker stalls.

For generations of Singaporeans, stalls selling popular street food have been an indispensable part of local life. Even amid unbearable midday heat, these open-air complexes draw office professionals, families and retirees with favorites such as chicken rice, prawn noodles and the nasi lemak coconut rice dish.

Hawker centers have won global acclaim, recognized by Unesco last year as an Intangible Cultural Heritage of Humanity.

Most of these stalls have been cash-only businesses though, and that’s part of the challenge as Singapore encourages consumers to use electronic payments.

As part of the Hawkers Go Digital program that offered incentives like cash payouts, more than 10,000 stallholders, or about half of the total on government-owned premises, have adopted e-payment solutions, according to a statement by the government agencies in charge of the program. Heading a year into the scheme, the country aims to convince all 18,000 stalls in these markets and hawker centres to offer e-payment options by June.

Singaporeans have been relatively slow to give up on cash. In a McKinsey & Co. survey of eight developed economies including South Korea, the U.S., U.K. and several northern European countries, Singapore beat only Japan, with cash estimated to account for 39% of the city-state’s transaction volumes last year.

Previously used to digging for loose change to pay for their sugarcane juice or fishing out a few dollars for a bowl of fishball noodles, diners can now pay vendors through a QR code. This gives them a choice of about 20 e-payment or banking apps, including local options like DBS Group Holdings Ltd. PayLah! and Grab Holdings Inc.’s GrabPay as well as foreign ones like Tencent Holdings Ltd.’s WeChat Pay.

Some of the oldest hawkers have been on the job since the 1960s, and many pass down their recipes to younger apprentices. The challenge of preserving the hawker trade has become a widely-discussed local topic in recent years, with the young less interested in work that calls for long hours in a hot environment.

To address such concerns the government has been trying to upgrade hawker stalls, with the coronavirus pandemic creating an opportunity to reduce use of cash that might be unhygienic.

“Covid-19 hastened the push for digitalization across all levels,” according to the agencies’ statement. The program aims to “accelerate the adoption of e-payments in an effort to raise hawkers’ productivity, support them in reaching out to new audiences, and minimize physical interaction and cash handling.”

This isn’t the first time Singapore has tried to convince its hawkers to go electric: Other digitization efforts have included incentives for hawkers who join food delivery platforms. The government has also attempted to preserve the hawker trade with development programs and monetary subsidies.

Still, hawkers have been slower to adopt e-payments than shopping-mall retailers, with some arguing that there’s no need to change.

One convert is Loh Kaihong, 58, who accepts mobile payments for his curry chicken noodle stall at the Hong Lim Market and Food Center in the central business district.

“It’s easier as I don’t need to prepare for small change, and obviously more hygienic because both the hawkers and customers don’t touch money,” Loh said. About 75% of customers pay digitally, and the figure is rising, he said.

To make the transition easier, the government is covering the cost of the 0.5% transaction fees for the first $20,000 worth of transactions per month per stall, until the end of 2023. The government will “carefully monitor to make sure that the costs are kept affordable in the longer term,” the agencies’ statement said.

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