Be sustainable with festive e-gifting: Tradition and technology can go hand in hand

With the Lunar New Year just around the corner, I overheard customers engaged in a spirited discussion at a neighbourhood coffee shop about how they will need to make online reservations for new notes before queuing up to collect them at the bank. They were agonising over the hassle just to get these notes for the red packets or “hongbaos” to be gifted as part of the festive tradition.

Indeed, the ritual of packet gifting is not unique to the Chinese. During Hari Raya Puasa (Eid al-Fitr) observed by Muslims, green packets are used to hand out gifts of cash. For Deepavali as celebrated by Hindus, purple packets are utilised.

But one feature is common across all forms of packet gifting – there is a distinctive cultural preference for crisp new notes, fresh from the bank, including the fragrance that comes with it. It is captivating that this tradition of giving physical new notes has somehow withstood the test and time of modern technology.

Back to the coffee shop encounter, it would have been very difficult for me to convince the discussants that they could reuse notes or even gift “e-hongbaos” instead. It was even more surprising that they were youngish-looking people who would probably be tech-savvy.

E-payment has been gaining steam in Singapore with the proliferation of services such as PayNow, PayLah!, and GrabPay. The Covid-19 pandemic has only accelerated the growth of this form of payment as businesses and banks encouraged consumers to switch to e-payment for contactless transactions. Given the ubiquity of a smartphone, most of us should be no stranger to e-payment services, and many might even be avid users of such services.

With the coming Lunar New Year, the Monetary Authority of Singapore has been encouraging the gifting of used notes or switching to e-hongbaos. The reasons are twofold: to support sustainability and to prevent overcrowding in banks during the pandemic. While many of us can understand the rationale of not visiting a crowded bank branch amid a pandemic, switching to e-hongbaos in the name of sustainability may be hard for some to justify in abandoning the cultural tradition.

Where did this tradition of giving out hongbaos come from? Legend has it that there was a demon named Sui in ancient times who went around terrorising children. To ward off Sui, parents decided to tuck their children in bed with coins wrapped in an envelope. When Sui came for the children, the coins would fall out of the envelope, emanating a ray of light that scared Sui.

Since then, the practice of giving hongbaos has evolved in form over various dynastic eras in China. However, coins were invariably used, not the physical notes seen today, let alone brand-new notes. It is probably only over the recent century that notes were used instead of coins because the newer coins did not have holes in the center for the giver to string together.

Sustainability Factor

While the current practice of gifting hongbaos is part of tradition, we should not neglect the sustainability imperative. Most of the red packets will most likely end up in the incinerator because these tend not be easily recyclable due to their designs and materials.

It is not just the red packets. The new notes that we painstakingly queue for, will only be used momentarily, after which they will become used notes that are deposited back to the banks at the end of the festive season. If the public continues to demand only new notes each Lunar New Year, the used notes have no opportunity to be recirculated.

In Singapore, as many as 100 million pieces of new notes are issued to meet the festive demand annually. The $2 denomination forms the bulk of new notes issued. Some of the used $2 notes that are deposited are reissued as good-as-new notes the following Lunar New Year. This recycling of used notes has helped to meet about 20 per cent of annual festive demand, reduced wastage and supported the environment.  

The remaining used $2 notes are more than what is needed to meet circulation needs, and the older excess notes are subsequently destroyed. The carbon footprint from producing and destroying the excess $2 notes is significant – equivalent to the annual emissions from powering 430 four-room public housing flats.

Practical Factor

Sustainability is not the only reason why we should be persuaded to give e-hongbaos a chance. The practical cost of printing paper currency is a key consideration too. Using available estimates, the U.S. Department of the Treasury’s Bureau of Engraving and Printing announced its 2021 currency operating budget to be US$1.1 billion. The cost of printing a U.S. one-dollar note is about 6.2 cents per note. This is just over 6 per cent of the note’s monetary value!

Traditions can move with the times, especially if we look at China where hongbaos originated. In 2014, the internet behemoth Tencent introduced the e-hongbao function in its ubiquitous WeChat platform. Many other players have joined the fray, some adding innovative bells and whistles such as embedded videos and “hongbao snatches”. The rest is history – the vast majority of the people in the country are now gifting electronically.

It is heartening to note that gifting of e-hongbaos is on the rise in Singapore. In 2021, DBS Bank reported more than 32,000 QR Gift transactions through the PayLah! app totaling $2 million, as compared to 18,000 totaling $660,000 in 2020 over the first two days of the Lunar New Year. Other banks also saw an upward trend in the transaction. UOB had three times the increase in e-hongbao transactions through the UOB app. Similarly, OCBC Bank observed a 140 per cent increase in e-Ang bao transactions through the OCBC app as compared to 2020.

Understandably, some might feel that e-hongbao will erode the essence of a festive occasion like the New Year. However, as some pragmatic folks have put it, if we view the gifting of hongbaos as a token of well wishes, it should not matter if the hongbao comes in the form of physical red packets or via electronic means. Indeed e-payment will not dilute the joy of giving and receiving.

E-hongbao is convenient as one does not need to visit the bank to queue up for new notes, or to deposit the money received after the festive season. A few clicks are all that is needed to give and receive. One also does not need to worry about misplacing the hongbaos.

In sum, we need to go beyond the reason of tradition to stick to physical hongbaos. From a sustainability or even practical viewpoint, the rationale for gifting e-hongbaos is compelling. In fact, the historical switch from coins to physical notes did not result in a loss of tradition.

Even if we believe the original myth that the emitted light from the coins can ward off the evil spirit of Sui, we can argue that the e-hongbaos, being electronic in nature, will probably do a better job than the physical notes.

The article is an abridged version of the one first published in CNA.