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Payment systems in Singapore have evolved due to technological advancements, changing customer preferences, and the onset of new financial activities.
The evolution has been subtle but swift as the economy moved from cash transactions to various cashless payment instruments.
According to a Nielsen survey, about 40% of Singaporeans began making most of their purchases online during the pandemic. Moreover, the residents of Singapore have the highest awareness among all the ASEAN countries about contactless and other novel payment methods.
Given the country's high financial and digital literacy levels, the rising optimization of Singapore's payment innovations is also wholly justified. As a result, established and growing businesses must quickly ramp up with these payment innovations to match their customers' expectations.
Singapore Payment Trends for 2024
In Singapore, the payment industry continues to progress further at lightning speed. 2024 will be no different, as new payment technologies will continue to see the day of light, making payments for the locals easier, faster, and better.
- As per the Monetary Authority of Singapore, in 2024, the South East Asian country will see the inclusion of wholesale central bank digital currencies.
- If trends are to be believed, the digital landscape will touch US$25.21bn in 2024.
- Digital wallets such as PayPal, Venmo, Cash App, and WhatsApp Pay are seeing a surge in usage over the past year.
Top 9 Payment Methods in Singapore
Singapore has multiple alternative payment methods and payment service providers. Each of which comes with its own strengths and weaknesses. Understanding and providing prominent payment methods can be a boon for companies as it not only increases checkout conversion rates but also helps with better customer experiences and reduced transaction charges.
Here are some of the most popular payment methods in Singapore that you must know.
1. Credit Card
Credit cards are one of the most popular payment methods in Singapore. Credit cards are so much preferred in the country that more than 73% of Singaporeans own at least 1 credit card. The key credit card issuers in the country include DSB, Citibank, OCBC, HSBC, and UOB. Visa, Mastercard, and American Express are the main credit card merchants with Visa holding a majority share of the market.
During COVID-19, Singaporeans have been increasingly spending online with credit cards. Between January and March 2020, OCBC reported that card spending at online grocers doubled, followed by a 50% increase in spending on both online food deliveries and video/music subscriptions, compared to the same time in 2019.
2. Cash
Cash is the second most popular payment method in Singapore after contactless payments and card transactions. However, consumer payments via cash are expected to decline from 22.3% in 2021 to 13% in 2025. Most of this share is expected to shift towards payment methods like mobile wallets.
3. Digital/Mobile Wallets
According to 2020 research from global fintech group Rapyd, Singapore is one of the top three digital wallet markets in Asia-Pacific. Singapore's adoption of digital wallets has remained uninterrupted for the past few years, thanks to the government's unrelenting attempts to transition the city-state to a paperless economy by 2025. Singaporeans have embraced digital wallets, prompting more digital wallet companies to start and expand throughout the country.
PayPal is the most popular payment gateway in Singapore among digital wallets. Some other prominent mobile/digital wallets in Singapore are Grabpay, AliPay, Nets, PayLah, Dash, FavePay, and Google Pay.
4. Cash on Delivery (COD)
Cash on Delivery is another preferred mode for customers who wish to make the payment after they have received the goods/services on offer. In Singapore, it is generally preferred by the customers to make the payments in cash.
5. Mobile Contactless Payments
Another popular payment method that gained popularity in Singapore in recent years is mobile contactless payments. Some prominent mobile contactless payment options like NETSPay, SingTel Dash and Visa Pay, dubbed as the "Pays" by industry insiders, use NFC technology to conduct purchases. To make transactions using these payment systems, the user's device must be within close range of an NFC-enabled POS machine or ATM.
NFC-based payments are less vulnerable to phishing attacks since they require two devices to be close to each other to exchange data. Several of these contactless payment apps also use QR codes and mobile phone numbers to make transactions. To pay using QR codes, the customer simply needs to scan the merchant's QR code.
6. Direct Debits
Direct Debits allow customers to pay for items by deducting funds from their bank accounts. The merchant debits (or withdraws) the relevant amount from the customer's bank account, which is then transferred to the merchant's account. This normally necessitates prior approval from the customer. This payment mechanism is suitable for automating recurring payments such as utility bills, loans, provident fund contributions, etc.
7. eNETS
eNETS is an integrated payment gateway that takes several payment modes and is a product of NETS (Network for Electronic Transfers), a Singapore-based online payments service provider. It accepts all major credit cards and currencies, as well as Direct Debit (online banking payments) from major Singapore and Chinese banks, such as DBS (Singapore and Hong Kong), UOB, OCBC, Citibank, and BNU.
8. Buy Now Pay Later (BNPL)
Amid the worldwide epidemic, shoppers in Singapore are increasingly turning to e-commerce platforms to finish their transactions. As a result, BNPL services have become commonplace. The usage of BNPL payments is predicted to increase significantly during the forecast period, with a CAGR of 25.5% between 2022 and 2028. By 2028, the country's BNPL Gross Merchandise Value will have increased from US$ 507.2 million in 2021 to US$ 3022.3 million.
9. Bank Transfers
Bank transfers are another preferred mode of payment by customers in Singapore. They are usually trusted for payments involving a relatively larger sum of money. Bank Transfers in Singapore are administered through automated clearing house (ACH) networks, which are made up of cooperating financial institutions.
FAST (Fast And Secure Transfers) is a new electronic funds transfer service that allows customers of partner banks to move Singapore Dollar funds almost immediately from one bank to another in Singapore. Here are some of the top banks in Singapore -:
- Development Bank Of Singapore (DBS)
- Overseas-Chinese Banking Corporation (OCBC)
- United Overseas Bank (UOB)
- Standard Chartered.
- Citibank
Good Read: Top 12 Payment Gateways In Singapore That You Need To Know About
Local Payment Methods and Rising Complexities for Businesses
How customers choose to pay businesses is highly influenced by the rapid technological advancements and the rise in highly disruptive global and socio-economical events.
New payment methods are being introduced rapidly, creating a very worrisome situation for business owners. Whether conglomerates or small business owners, the changing payment preferences have made it difficult for everyone to maintain a dynamic and streamlined payment system.
Integrating new payment methods and onboarding payment gateways and merchants every other month is becoming increasingly complex.
This calls for a unique solution that could easily accommodate the varying customer preferences and new payment innovations as they are introduced to the market.
How Does inai Help you with Singapore Payment Methods?
The inai platform is uniquely designed to integrate more than 300+ international payment methods, including the ones widely popular and acceptable in Singapore. Our payment platform provides a single source of integration and connects to multiple payment gateways and numerous local payment methods.
inai’s developer-friendly payment integration model helps support flexible business models, including e-commerce and other digital marketplaces.
Besides supporting seamless pay-ins and pay-outs, our platform helps business owners improve their conversion rates during checkout.
This has been made possible by offering a localized checkout experience (payment methods, language, or currency). Fully customizable front-end and best-in-class CXO dashboards ensure alignment with your brand design and assist you in refund management and assessing failed transactions.
