Buy now, pay later to make up 8% of e-commerce transactions in 2025: FIS
Digital payment methods chip away at card use and bank transfers.
Buy now, pay later (BNPL) market is projected to grow at a compound annual growth rate (CAGR) of 40% through 2025 to become the fastest growing online payment method in Singapore, reports FIS.
BNPL made up only 4% of the e-commerce transaction value in 2021, but is expected to climb 4 percentage points to make up 8% of total value by 2025.
Online payments continued to thrive in Singapore in 2021 and is expected to grow stronger until mid-decade as the local e-commerce market rapidly grew, according to FIS’ latest Global Payment Report. The local e-commerce market is expected to rise at 16% CAGR through 2025 and hit US$10.7b.
Whilst credit and charge cards remained the leading online payment in 2021–making up 42% of the total e-commerce transaction values–digital wallets are on track to chip away at its dominance and make up 31% of transaction values by 2025.
In 2021, digital wallets made up 29% of all e-commerce payments.
Outside of e-commerce sales, point of sales (POS) transaction value in Singapore also rebounded strongly in 2021, growing 23%. This is the largest expansion amongst all APAC markets, FIS said.
Credit and charge cards remain the leading in-store payment method and are predicted to maintain their dominance in POS transactions through 2025.
But mobile wallets are growing increasingly popular in-store and is projected to narrow the gap with card-use, to make up 23% of POS value by 2025 compared to cards’ 37% share by mid-decade.
Cash use will continue to decline to only 13% of total value in 2025, according to FIS.