Disclaimer: Unless otherwise stated, any opinions expressed below are solely the author’s.
Given the number of different support programs offered by the Singapore government, one might wonder if there aren’t too many and if not it wouldn’t be convenient to just issue a lump sum payment to every eligible person.
After all, it’s not like the government isn’t already doing that, it’s directly funding GST Vouchers, Assurance Package payments and living expenses support, which have been popping up 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 everyone, and certainly not the government, which uses its power to direct money to certain sectors of the economy.
Cash is liquid, and you can do whatever you want with it, including taking a nice day trip to JB to spend it there instead of going to Singapore. You can use it to shop online on one of the many ecommerce platforms, most of the money is sent to sellers in China or other countries.
This sees Singapore dollars leaving the domestic economy, benefiting others instead.
Smarter Singaporeans would choose to save it instead, which isn’t bad in itself, but it keeps the money idle.
Finally, careless consumers could simply spend it on more “sinful” pleasures, ending up with no money for everyday needs.
The voucher format allows the government to impose strict rules on their use: 50% is allocated to purchases in supermarkets and the other half is given to retailers and small, hearty retailers.
This ensures that this pool of money is used in the most profitable way and provides authorities with information on how and where the money is spent.
However, there is one more goal they have achieved since their launch six years ago, which cannot be mentioned.
Going digital—and staying there
CDC vouchers were started as an assistance program for the COVID-19 era, initially issued on paper and targeted at the poorest households.
As the pandemic continued in 2021, the program was eventually extended to all citizen families by the end of the year and went digital with the launch of the RedeemSG app. Retailers can use it to accept vouchers by scanning digital QR codes on customers’ phones, instead of dealing with paper.
In parallel, the government introduced a plan Hawkers Go Digital in June 2020, with a large subsidy and a waiver of transaction fees, which were intended to help merchants receive digital payments and reduce the risk of spreading the virus.
It’s also a great opportunity to encourage them to use mobile payments, which have become a staple in many countries around the world (especially China, with its massive WeChat system).
The last issuance of 0.5% fees ended recently on Jun 30, 2026, after several previous extensions. This means that merchants will have to bear the cost themselves, which may mean that some of them may prefer to return to paying in cash only.
But that’s where the CDC program comes in.
Throughout the push for digital payments, critics complain that many older merchants may be struggling with the transition, rather than being very tech-savvy. Furthermore, a skill once developed needs to be kept in use before it falls out of favor. Old habits die hard after all.
However, while we may see some return to cash, there is no return to paper CDC vouchers.
And because of the scale of the program, which is currently over S$1 billion per year, merchants have a strong incentive to keep their RedeemSG app accepting voucher QR codes.
In other words: there is no exit from the QR era.
Of course, using the CDC app does not force merchants to accept all digital payments, but since they still have to deal with QR codes to accept vouchers, it provides a very useful adherence, which will keep most of them on the digital train.
- Read other articles we’ve written about Singapore businesses here.
Featured Image Credit: CDC/depositphotos
