Tuesday, 5 March 2024

Digital Wallets Projected to Dethrone Credit Cards as Leading Online Payment Method in Singapore by 2026

5 min read

Singapore, April 12, 2023 – Already the leading payment method in APAC, and the fastest growing e-commerce and point-of-sale (POS) payment method in Singapore, digital wallets will continue to extend their leadership position through to 2026, according to a new report released today from global financial technology leader FIS (NYSE: FIS).

The annual Global Payments Report by Worldpay from FIS examines current and future payment trends across 40 markets. Findings from the 2023 report show that globally consumers are switching to alternative payment methods (APMs) including digital wallets and Buy Now Pay Later (BNPL) as they look for more choice, convenience and control at the checkout. 

Digital wallets in APAC (excluding China) have more than doubled their e-commerce market share in the last five years, while their POS market share grew sixfold in the same timeframe. Singapore follows this trend, with digital wallets poised to lead the way online by 2026, accounting for 40 percent of e-commerce market share.

At POS, Singaporean consumers’ digital wallet adoption lags other Southeast Asian markets as its more mature economy is heavily influenced by using credit and debit cards. In 2022, credit cards earned the largest POS market share (36 percent) in Singapore. Nonetheless, digital wallets’ POS share is projected to reach 29 percent by 2026, reflecting a 101 percent increase in transaction value from 2022. 

Yvonne Szeto, VP Commercial APAC, Worldpay from FIS said: “APAC is at the forefront of digital payments innovation, leading developments in the cross-border real-time payments space, central bank digital currencies and the likes. It is also the region where digital wallets first took hold as the dominant payment method, and that dominance shows no signs of abating. Singapore features a diverse landscape of digital wallet providers including wallets affiliated with banks, super apps and e-commerce platforms. 

As a mature payments market, credit and debit card usage remains strong in Singapore and will continue to penetrate the market as one of the main methods used to fund digital wallets.However, given digital wallets’ strong growth trajectory, local merchants in all consumer-facing verticals need to make digital wallet acceptance a priority both online and in-store in order to meet the needs of Singaporean consumers now and in the future.”

Singapore Payment Trends:

According to the Global Payments Report:

  • Cards are currently the preferred payment method for Singaporeans. Combined, credit and debit cards represented a majority of e-commerce (53 percent) and POS (57 percent) market share in 2022.
  • However, based on our projections, digital wallets (40 percent) are set to overtake credit cards (36 percent) as Singapore’s leading online payment method by 2026.
  • At POS, digital wallets are the fastest growing payment method, with its transaction value projected to increase 101 percent between 2022 and 2026.
  • BNPL’s total e-commerce transaction value is projected to almost double (96 percent) to over US$1 billion by 2026.
  • However, BNPL’s e-commerce market share is projected to only increase slightly from 5 percent in 2022 to 6 percent in 2026. 
  • While Singaporean consumers continue to move away from cash, with cash representing 19 percent of POS market share in 2022 (down 3 percent from 2021), cash use is still relatively strong compared to other APAC markets such as Hong Kong (10 percent) and Australia (6 percent).

 

Re-disseminated by The Asian Banker

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