SINGAPORE: Bogged down by coins in your wallet, or burdened by it jangling in your jeans?
US-based start-up Bucket Technologies is hoping to eliminate the need for physical coins by digitising them and storing them on its "digital piggy bank platform". "Bucket captures all of the value of coins while eliminating the need to physically move them," its website stated.
Co-founder Daniel Kam, in town for the ongoing Singapore Fintech Festival, cited an example of how the service would work in an interview with Channel NewsAsia on Thursday (Nov 16): When a consumer goes to Starbucks to buy a coffee, which costs S$4.75, the point-of-sale (POS) machine will churn out a receipt for S$4 in cash, and a QR code linking to Bucket's website for the remaining change in coins.
The user can then either scan the QR code via a mobile app, or through the website, to deposit the coins in his or her account, Mr Kam explained. For first-time users, they would be prompted to register for an account with their names, email addresses and phone numbers, he added.
As long as they shop at retailers signed on with Bucket, the consumers will get their change in coins via their digital piggy bank, and once the amount hits S$50, they will be prompted to cash out, the 41-year-old co-founder elaborated.
It hopes to make money by gaining as many customers, and by extension coin deposits, as possible, and get "favourable interest rates" from the bank handling the deposits. In other words, revenue is generated by short-term interest accrued on the aggregated amount of coins.
"BUCKETING" CHANGE IN SINGAPORE
Bucket hopes to launch its service first in Northwest Arkansas, United States, in early 2018, but Mr Kam shared that it is looking to bring it to Singapore by "mid- to end-2018".
When it does, subscribers can cash out in two ways: Through a bank account, or donate to a charity. The latter will be done through a partnership with the National Volunteer and Philanthropy Centre (NVPC), which will act as a disbursement point for the charities under its umbrella, the start-up co-founder explained.
He said Singapore is chosen as a "proving ground" for its service, given its small size and its leaders' determination to be a digital economy with its Smart Nation aspirations. Prime Minister Lee Hsien Loong had said the country will go bigger on electronic payments, with initiatives such as PayNow and the creation of a common QR code.
He also pointed to the Monetary Authority of Singapore's findings in 2016, which revealed that 60 per cent of non-stored value facility transactions are done with cash. The study, done by KPMG, noted that cash is generally used for small-value transactions such as dining at a hawker centre, as well as higher value ones such as paying for private tuition or obtaining domestic help.
The start-up also conducted its own survey here, which reinforced these findings.
A survey of 501 cashiers working in Singapore - excluding hawker centres – was carried out in June this year, and they were each asked four questions about handling payment at point of sale. The respondents were divided into six segments: Convenience, fashion, food, goods, grocery and services.
One of these questions was if their jobs would be easier if they do not have to count out and give back change in coins in a transaction, and 89.5 per cent of cashiers working in convenience stores said yes, followed by those in services (75 per cent) and grocery (73.47 per cent). It was also found that convenience stores handle the most amount of cash in transactions of the six segments.
Asked where the service will first be launched here, Mr Kam declined to give too much away, except to say that it will be introduced in a "centralised", non-high-income area where there are about 100 retailers with POS machines.
“The majority of retailers here can’t just leapfrog cash, but by digitising the most burdensome part of this instrument – coins – it is a stepping stone towards being a cashless society,” he said.
The start-up has already set up office in Singapore, with one employee currently, and will ramp up hiring for people in the areas of marketing, community development and signing up of retailers later next year. It hopes to recruit about 12 to 20 people for Singapore, he said.
It is currently working with MAS, through its Financial Sector Technology and Innovation - Proof of Concept scheme, to get government funding for its venture, he added. The scheme provides funding support of up to 50 per cent to 70 per cent of qualifying costs, capped at S$200,000, for up to 18 months to qualified applicants, according to the central bank's website.