This year, Singapore’s digital payments market has experienced a surge. This is because a growing number of e-commerce platforms support digital payments, and vendors are increasingly offering contactless and mobile payment options to consumers. Thanks to digital wallets and mobile payment apps like CashApp, Venmo, PayPal, etc., seamless and secure transactions can now be carried out. Additionally, Singapore has witnessed a boom in fintech startups, this can also be linked to the rise in digital payments. Last year, Statista reported a total of US$17.17 billion in digital payment transactions in Singapore.
Additionally, convenience and speed are factors that contribute to the increase in popularity of digital payments in Singapore. This is especially the selling factor for younger generations and millennials. Almost all businesses have become digitized in Singapore. This leads to a need for secure and safe payments, which increases the acceptance of digital payments. Some of these digital payment methods include card payments, bank transfers, digital wallets, and Buy Now, Pay Later (BNPL).
Let’s take a closer look at the preferred payment methods in Singapore in 2023. This article will also analyze Singapore payment trends that may predict the future payment market for the coming years.
Singapore Payment Methods in 2023
Singapore, an Asian financial hub, is one of the world’s largest centers for financial activity. Although a small country, it offers a thriving business environment and proposes global connections, positioning it as a pivotal hub for businesses seeking expansion in both Asia and other regions.
Cards Reign Supreme for Digital Payments in Singapore
When it comes to payment methods in Singapore, cards are the preferred method of payment. There is a circulation of 7.7 million cards in the country. This is closely followed by bank transfers and NETS payments. Contactless payment options and e-wallets, such as Apple Pay and Google Pay™, are also gaining popularity.
According to a report by Global Data published in 2022, card payments (debit and credit) were the preferred payment methods in Singapore for online and mobile shopping. Credit cards were preferred for shopping even more than debit cards. Another popular payment method in Singapore is digital wallets. They reportedly had a penetration rate of 30.4% in 2021.
Cross-border Transactions on the Rise
Keeping in mind the size of Singapore as a country, there were 55% cross-border digital transactions as well. The highest share of these transactions was linked to fashion and apparel, while some of them were linked to cosmetics. Through this data, it is predicted that international sellers can benefit from Singapore’s e-commerce market. Even in cross-border transactions, cards are the preferred method, followed closely by bank transfers.
Singapore also launched real-time payment systems with different countries to facilitate faster and cheaper cross-border transfers. The introduction of the integrated system simplifies the process of transferring funds, reducing the need for the recipient’s bank account information and full name. These requirements are generally part of traditional remittance systems. Lengthy transaction periods and high fees can now be avoided with the introduction of this system as well.
QR Payments: Fast & Easy Digital Payment Method in Singapore
In recent years, Singapore has witnessed a rise in the popularity of QR payments as the preferred method of payment. This surge can be attributed to factors such as the convenience and simplicity of QR payment methods. With just a smartphone and a scanning app, consumers can quickly and securely make payments without the need for physical cash or credit cards. The interoperability of QR codes allows for seamless transactions between different payment providers, increasing their accessibility.
The Singapore government’s push towards a cashless society, coupled with extensive infrastructure development, has played a significant role in promoting QR payments as well. Singapore’s robust digital infrastructure and widespread availability of payment terminals have made it easy for businesses of all sizes to adopt QR code payments. Additionally, various incentives and initiatives introduced by the government, such as the SGQR system, have incentivized businesses to adopt this payment method. QR payments have accelerated post-COVID since consumers value the hygienic and touch-free nature of such payments.
Accessible Digital Wallets
According to a study by payments provider FIS, digital wallets will overtake credit cards as Singapore’s leading online payment method by 2026. Apart from its ease and convenience, digital wallets are extremely safe to use. The robust security measures implemented by digital wallet providers have instilled confidence among consumers. Through digital wallets, consumers can link their wallets to their bank accounts or credit cards without compromising their financial data. If we are to look at Singapore payment trends, it is advisable for businesses to start providing digital wallet acceptance in the coming years. Digital wallets are also reportedly going to penetrate the market by 94.7% by 2025.
Payment Methods in Singapore: Ranked by Popularity
There are numerous options for alternative payment methods in Singapore and various payment service providers available. Each of these options has its own advantages and disadvantages. Having a thorough understanding of these payment methods is beneficial for companies, as it not only improves the conversion rates during checkout but also enhances customer experiences and minimizes transaction fees. Following are some of the most popular payment methods in Singapore:
Credit Cards
Over 73% of Singaporeans own at least one credit card, making credit cards a popular payment method. The country’s leading credit card issuers are DSB, Citibank, OCBC, HSBC, and UOB, while Visa, Mastercard, and American Express dominate the market.
After the pandemic, there was a noticeable surge in online spending among Singaporeans using credit cards. According to OCBC’s 2020 report, card spending on online grocers saw twice the increase, while spending on online food deliveries and video/music subscriptions had a 50% rise compared to previous years.
Cash
In Singapore, cash ranks as the second most favored payment option, behind card transactions. However, there is a projected decline in consumer cash payments, dropping from 22.3% in 2021 to an estimated 13% in 2025. This is because alternative payment methods such as mobile wallets are becoming more popular due to their ease of use and convenience.
Digital Wallets
Based on research conducted in 2020 by Rapyd, Singapore emerges as one of the leading digital wallet markets in the Asia-Pacific region. The steady growth of digital wallet usage in Singapore is because of the government’s persistent efforts to transform it into a paperless economy by 2025. Consumers have increasingly adopted digital wallets, and numerous digital wallet companies have popped up since then.
In Singapore, PayPal stands out as the most widely used payment gateway within the realm of digital wallets. Additionally, other notable digital wallets gaining popularity in Singapore include Grabpay, AliPay, Nets, PayLah, Dash, FavePay, and Google Pay.
Contactless Payments
Contactless payments utilize NFC technology and offer various options such as NETSPay, SingTel Dash, and Visa Pay. These payment systems require the user’s device to be in close proximity to an NFC-enabled POS machine or ATM for transactions. One advantage of NFC-based payments is their heightened security against phishing attacks, as they require close physical proximity between two devices for a transaction to be processed. Many contactless payment apps utilize QR codes and mobile phone numbers to facilitate transactions as well. To make a payment using QR codes, customers can simply scan the merchant’s QR code.
Buy Now, Pay Later (BNPL)
Singaporean consumers are increasingly relying on online shopping platforms to complete their purchases. The use of Buy Now Pay Later (BNPL) services has become widespread. Experts project substantial growth in the adoption of BNPL payments by 2028. It is anticipated that by 2028, the total value of BNPL transactions in Singapore will surge from US$ 507.2 million in 2021 to US$ 3022.3 million.
Bank Transfers
Customers often opt for bank transfers as their preferred payment method in Singapore. This mode of payment is particularly trusted for transactions involving a high amount of money. Singapore’s bank transfers operate through automated clearing house (ACH) networks, which consist of collaborating financial institutions. A recent addition to this system is FAST (Fast And Secure Transfers), an electronic funds transfer service enabling customers of partner banks to swiftly move Singapore Dollar funds between different banks within the country.
Oceanpayment: your best payment service provider in Singapore 2023
Keeping in mind Singapore payment trends, and the variety of payment methods in Singapore, Oceanpayment is the ultimate choice for digital payments in 2023. Oceanpayment even offers cross-border payment solutions for all business models, which, as seen in the article, is of immense benefit to companies with consumers in Singapore. Oceanpayment caters to a wide range of industries and offers seamless solutions and options for digital payment acceptance.
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