The 2021 Lunar New Year is approaching and authorities in Southeast Asia are now encouraging locals to turn to virtual red packets and online transactions, instead of using paper currency notes (in order to prevent the further spread of COVID-19).
Asian residents are also being asked to complete digital payments and use virtual red packets as an alternative that’s more environmentally friendly and which is of even more relevance in a post-COVID world.
Now with the Lunar Year only a few days away, the Monetary Authority of Singapore (MAS) has been requesting the city-state’s residents to use “e-hongbao” in order to help reduce long waiting lines for physical bills and because they’re a lot more climate-friendly. The MAS noted that around 330 tons of carbon emissions are produced as a result of the printing of new notes every Lunar New Year.
An e-hongbao is a digital or virtual red packet where transfers are carried out by the scanning of QR codes or through an electronic funds transfer. Just like a physical red envelope, an e-hongbao comes in various designs along with customizable greetings and graphics (depending on the users’ banking provider).
In Singapore, all of the large banking institutions, including DBS Bank, OCBC Bank, UOB, Citibank, Standard Chartered Bank and Maybank, will reportedly be providing virtual red packets this year so that it becomes easier to observe social distancing requirements during these difficult times.
The functionality will run on PayNow, which is a peer to peer fund transfer service in Singapore that is available to nine local banks. It allows customers to send and receive Singapore dollar or SGD funds from one bank to another (near) instantly using their mobile number or a Singapore national registration identity card (NRIC) or number/foreign identification number (FIN).
During this end-of-the-year festivities, banking clients of these financial service providers will have the option to send digital red packets via PayNow and also add a special Lunar New Year greeting for recipients to receive through their Whatsapp or SMS transaction notifications.
Clients of certain local banks will also have the option to include specially-designed festive graphics that may be sent along with these greetings.
DBS Bank is providing two main options to clients in 2021: the DBS QR Gift (also referred to as the QR Hong Bao), and the eGift. Although the eGift offers a completely digital experience, the DBS QR Gift, which allows clients to loan cash values onto unique QR codes, has been designed to strike a balance between tradition and modern technology. At present, the DBS QR Gift is the city-state’s only “phygital” alternative to regular gifting.
UOB clients will also have the option to send e-hongbaos “instantly” and conveniently via tjhe UOB Mighty app (available through PayNow or QR Pay).
Although the majority of large banking institutions in Singapore are offering e-hongbao functionalities, it seems that none of the city-state’s non-bank mobile wallets, such as GrabPay, FavePay and EZ-Link Wallet are offering a similar option.
At present, the Southeast Asian country is in the third phase of its reopening following the COVID-19 outbreak, under which social meetings of up to 8 people are permitted.