E-wallets to overtake cash in Singapore's in-store payments by 2024
Cards will remain king, but e-wallets will overtake them in online purchases.
Cash use in Singapore is projected to decrease rapidly in the next four years as the e-wallets’ market share continues to grow, a trend accelerated globally by the pandemic.
Singapore’s point-of-sale (POS) market is projected to increase by 22% over the next four years as the pandemic subsides to reach $185.2b (US$139b) in value, according to the latest Global Payments Report published by technology solutions provider FIS.
Whilst cash use accounted for 26% of in-store payments in 2020, this is projected to decline rapidly through 2024.
Instead, digital wallets such as DBS PayLah! and Apple Pay are capturing greater consumer loyalty as Singaporeans shift away from cash, and are expected to account for 20% of the POS market by 2024.
Digital wallets have been on the rise for years but have accelerated amidst the COVID-19 pandemic, notes Phil Pomford, general manager APAC, worldpay merchant solutions at FIS. He advised merchants to offer more payment methods to provide more payment options for customers.
“As digital wallets begin to outpace cards and cash transactions in Singapore, it’s important that merchants begin to explore the full capabilities of alternative payment methods, positioning them to be able to improve the checkout experience for consumers,” Pomford said.
Merchants who position themselves with digital payments capabilities will be well-positioned to capture the next wave of growth as eCommerce expands in the country, he added.
Meanwhile, credit cards remain king of in-store payment methods, accounting for 38% of transactions in 2020. Cards are projected to retain this market share for in-store payments through to 2024.
But for online payments, digital wallets are forecasted to overtake credit cards as the most popular online payment method in the next four years.
Buy Now, Pay Later (BNPL) payment methods are also gaining in popularity, notes FIS.
The rise of e-commerce accompanied increased use of non-cash payment methods in Singapore. The country’s e-commerce market reached $9.3b (US$7b) in 2020, and is projected to grow by 40% to $13.3b (US$10b) by 2024.
In 2020, credit card payments (45%), digital wallets (20%), and bank transfers (12%) were the most popular online payment methods in 2020.
Buy Now, Pay Later are also gaining popularity, and is the fastest growing online payment method in Singapore. Currently only 3% of the market, it is on track to increase to 13% by 2024, according to FIS.
(US$1 = S$1.33)