From DBS bank, a basic ATM card (left) and a Visa-linked card (right)

The trend towards cashless payments is inexorable, even if it is gradual. The question that has concerned TWC2 for some time has been whether this increasingly excludes low-wage migrant workers who make up a fifth of our population.

Cashless payment systems such as NETS and PayNow in Singapore require that users have bank accounts. App-based transactions often require a credit or debit card too.

Bank accounts for migrant workers

Until 2020, the Ministry of Manpower (MOM) held back from making it mandatory for employers to open bank accounts for non-domestic migrant workers. Banks themselves typically would not do so unless a worker is sponsored by an employer; a worker couldn’t walk into a bank to open an account for himself. To begin with, far too many employers withhold workers’ passports. Without a passport, how is one to open an account?

Even now, while the ministry has put in a rule (see undated page on MOM’s website Paying the salary of foreign worker) that says:

You must pay the salary by crediting the wages directly into the worker’s bank account if they stay in dormitories.

The sentence right after that says:

If your workers do not stay in dormitories, you can pay the salary by cash.

Even the first sentence is not fully adhered to. On average, TWC2 sees a worker a week who stays in a dormitory but tells us he is still paid in cash. This suggests a practice of rulemaking with no effort towards enforcement – a common feature of our migrant worker regime. Even when the workers make salary claims, in the process of which they report that they were not paid via bank accounts, the claims department does not seem to pass the information on to the enforcement department for action.

That said, the situation today is still vastly different from several years ago.

Much changed between 2016 and 2023

In 2016, we did a survey and found that 55 percent of 301 migrant worker respondents were paid in cash (see Over 80% of male foreign workers want to be paid through bank giro.

Seven years on, in 2023, our impression is that over 90% of workers have bank accounts and generally, their salaries are paid into them, though there are still some maddening stories, as described in the post-script. However, having a bank account is one thing, being able to execute cashless payments through NETS, PayNow or credit/debit cards is another.

We decided to do a series of small surveys (more like straw polls) to get a better sense of the situation on the ground. The first of these was simply to ask workers whether they had on them a bank card and whether their card was merely a basic ATM card or one that was affiliated with Visa or Mastercard. Basic ATM cards have NETS capability, but some merchants do not accept NETS, instead requiring Visa or Mastercard, as do online payments – thus the significance of this question.

Our straw poll

We asked 25 workers to show us their bank cards. Two of them (8%) said they did not have a bank account. Of the rest, we noted their bank name and whether the card had Visa or Mastercard functionalities.

We also asked each worker which year they were issued the particular bank card they showed us (not how long they have had a bank account). The answers were in the range 2017 to 2023, but since there was no discernible pattern, we left these datapoints out of the analysis.

As can be seen from the table above, about half of the 23 men had a basic ATM card with NETS capability. The other half also had debit card capability through Visa or Mastercard. Given their low salaries, we don’t expect any to have credit card facilities.

These findings set the stage for a subsequent round of straw polls looking at whether they use NETS or debit card functions for payments. We will report our results in another post.

At some point, we will also be looking at whether they are able to use PayNow, but we have already noticed that few workers had QR code scanners installed on their phones. So, it looks as if before we can do a PayNow study, we first have to do another straw poll about whether they know how to scan QR codes.

The maddening examples

As pointed out above, about one in ten workers that TWC2 sees, mostly from the construction, marine shipyard and process sectors, still do not have bank accounts despite staying in dormitories. If they are paid their wages, they are paid in cash. This would be against MOM’s rules, though as mentioned above as well, TWC2 has yet to see an example of enforcement action in the last few years.

In recent months, four workers told us of their unique experiences.

One worker said the employer opened a bank account for him at the start of employment, with the first two months’ salaries paid into it. From the third month on, salaries were paid in cash even though the bank account was still live. He was staying in a dormitory.

Another worker said the employer refused to open a bank account for him despite his repeated requests. Interestingly, the employer was not planning to pay salaries in cash; he was quite ready to pay through bank transfer. The boss asked the worker to nominate a bank account of a friend and for the following few months, the worker’s salary was paid into the friend’s account. The friend lived in a different dormitory, and for the friend to hand over the money (in cash) to the first worker was a logistical nightmare (they didn’t always have the same Sundays off).

As to why these two employers did as they did, TWC2 cannot explain.

The third and fourth examples were of two workers who were “paid” by means of the employer sending money to their families in India in rupees. In both cases, there were disputes about the difference between the rupee amounts and the agreed salary. One of the two men (the third example) told TWC2 he never agreed to his salary being paid directly to his family, but the employer did so nonetheless. This man was housed in a dorm and he should have had a bank opened for him, with his salary credited into that account.

The other man (the fourth example) was not housed in a dorm, so technically under MOM’s lax (and anyway unenforced) rules, it wasn’t mandatory to pay him via bank transfer.

In all four cases, the men did not have proper payslips, despite an MOM rule since 2016 making this mandatory (see this page on MOM’s website Itemised pay slips). Since 2016, we have had hundreds or thousands of salary cases, many of which involved workers who were not issued detailed itemised payslips as required by this rule. Since these were workers filing salary claims, MOM would have known that the documentation from their employers was substandard, but, as far as TWC2 can see, nothing was done about it. This is another example of rules with no visible enforcement.