SINGAPORE: Just two months after last year’s Chinese New Year celebrations – when some were likely still indulging in pineapple tarts and bak kwa – a DBS team had already begun preparing for this year’s festivities.

By October 2024, they were planning the bank's signature pop-up ATMs, designed to meet the demand for cash used in gifting. By Christmas, the set-up of these ATMs had started.

Chinese New Year is the bank's busiest time of the year, said Ms Tan Lay Peng, branch service manager at DBS Westgate in Jurong East. 

On the morning of Jan 14, the first day that customers could collect new and fit-for-gifting notes, more than 10 people had already formed a queue outside the branch – even though it would not open for another hour.

Every year, about 100 million new notes are issued for Chinese New Year and other festive periods, according to the Monetary Authority of Singapore (MAS). Last year alone, more than 11.7 million fit-for-gifting notes were obtained from banks, including through ATM withdrawals.

MONTHS OF PREPARATION

To meet demand, DBS set up 72 pop-up ATMs for the festive period this year, said Ms Karen Looi, the head of branch banking.

Setting up these ATMs involved a three-and-a-half month process, including constructing protective “housing” and testing to ensure operational readiness.

Security company Brink's Singapore processes new and fit-for-gifting notes for DBS. Blocks of new notes, sent by appointed printers such as Note Printing Australia, are unwrapped by gloved hands, rearranged and packed into cassettes. Fit-for-gifting notes are similarly handled in a room with stacks of cassettes waiting to be filled.

Each cassette, labelled CNY or CNY Fit, typically holds 2,000 to 2,500 notes. Each is also marked with key details, including the denomination and the exact quantity of notes it contains.

Weeks before Chinese New Year, the process of loading these cassettes into the ATMs starts.

Pop-up ATMs mostly contain five cassettes, while regular ATMs can take up to nine cassettes. Security firms such as AETOS handle the critical task of replenishing the ATMs.

“Typically, we would be doing about 250 to 300 trips a day,” said Inspector (Auxiliary Police Force) Shanthan Thevar of the specialised services division. “But with this demand (during Chinese New Year), we can go as high as 600 trips.”

The number of AETOS teams also increases from between 16 and 20 to nearly 30, in the two weeks leading up to the festival.

MANAGING FESTIVE CROWDS 

On the first day of notes collection at the DBS branch in Westgate, staff arrived 30 minutes earlier than usual to prepare for crowds.

Before the doors opened to the deluge of customers, staff unwrapped stacks of cash and placed them into drawers behind the counter. Queue numbers were distributed to customers to manage foot traffic.

“To handle the crowd, we usually deploy extra manpower to help us manage the queue as well as to answer customer queries on note exchanges,” said Ms Tan, the branch service manager.

Similarly, OCBC boosts its workforce by hiring about 40 per cent more temporary staff, according to Ms Jean Oh, head of branch service and risk management.

UOB also sees a sharp increase in withdrawals during this period. In January and February last year, the average number of cash withdrawals a month was more than 10 per cent higher than the rest of the year, said Mr Benny Chan, managing director of group channels and digitalisation.

“Gifting of physical red packets remains a Chinese tradition that many customers still hold dear and we continue to see stronger demand for cash during (the Chinese New Year) period, be it new or fit notes,” he said.

THE RISE OF E-HONGBAO

While physical red packets are still popular, the three major banks noted a growing preference for digital alternatives.

Last year, DBS saw a doubling in customers gifting e-hongbao – where recipients scan a QR code packed in a physical hongbao – compared with 2023, contributing to a 7 per cent year-on-year decline in cash withdrawals.

OCBC’s head of digital business in Singapore Ng Lee Peng said even older customers are embracing e-hongbao.

“Last year was the first time we saw the number of people sending e-hongbao outstrip the number of people withdrawing cash either at the special CNY ATMs or the branches,” she said.

UOB's Mr Chan said the number of e-hongbao gifted by its customers is expected to exceed half a million this year. 

PayNow transactions also see a significant boost during this period. Mr Chan said PayNow usage during Chinese New Year increases by more than 20 per cent for UOB, with transaction amounts rising over 30 per cent.

MAS has been actively encouraging the use of fit-for-gifting notes over new ones, citing sustainability concerns.

Most new notes are used only once before being returned to the central bank, then processed and reissued as fit-for-gifting notes. However, the stockpile of these notes continues to grow, MAS said.

S$2 (US$1.50) notes remain the most popular denomination for Chinese New Year gifting, with the stock of fit-for-gifting S$2 notes increasing by 15 to 20 million pieces annually over the past two years.

"Over time, when storage capacity is exceeded, the excess will need to be incinerated, resulting in unnecessary wastage," the central bank said.

MAS estimated that around 20 million excess new S$2 notes are issued each year. The carbon emissions from producing these notes are equivalent to powering 400 four-room HDB flats, and offsetting this would require planting 10,000 new trees annually.

Despite this, demand for new notes remains high. Customers still hold on to old-school traditions and ask why there are limited new notes, said Ms Tan, the branch service manager at DBS.

She reassures them that the recipients of red packets would be very happy to receive the money, regardless of whether the notes are new. 

That answer seems to tickle customers. “You can see the seniors all laughing,” Ms Tan said.