Understanding Singapore’s contactless payment revolution: A look ahead

Cash is no longer king in Singapore.

Over the past decade, the variety of payment methods in Singapore has expanded significantly — and contactless payments are leading the way. Reflecting the city-state's transition from cash-based transactions, 90% of consumer payments in Singapore are now made through digital channels.

Technological advancements such as the Singapore Quick Response Code (SGQR), along with a high smartphone penetration rate, and strong government support have made it easier for Singaporean consumers to embrace contactless payments. These trends have even impacted cash-reliant sectors like traditional hawker centres, where most cooked-food stall holders have started accepting e-payments in 2023. The country's payment landscape will continue to evolve as more consumers integrate digital payment methods into their daily routines.

Here's what you need to know about Singapore's contactless payments revolution.

The rise of contactless payments in Singapore

The surge in adoption of contactless payment methods in Singapore can be due to several factors.

First, the introduction of Near Field Communication (NFC) technology in 2012 allowed consumers to use various digital payment methods. Companies such as DBS Bank, EZ-Link (Singapore's contactless smart card system for public transit), and Citibank Singapore made credit and debit card transactions commonplace, through stored value or pre-loaded payment products.

By 2021, 31% of Singaporean consumers preferred contactless payments and 23% opted for online card payments. The COVID-19 pandemic had accelerated the shift, as safety concerns around handling cash boosted the use of digital payment platforms.

In addition, the smartphone penetration rate surpassed 95% in 2023, and today, 96% of the Singaporean population has internet access. These drove the rise of mobile wallets and digital payment methods.

Contactless payments will likely become the norm nationwide as the government pushes for a more digital economy. This shift is evident in the wide range of payment options available to Singapore consumers.

Popular payment methods in Singapore

Singapore's payment landscape is a blend of traditional payment methods and digital innovations, reflecting the diverse preferences of Singaporean consumers.

1. Credit cards: Visa and Mastercard remain the primary payment method for e-commerce, making up 42% of online payments. Singaporeans trust credit cards for their convenience, speed, and security. With over 6 million principal credit card owners in the second quarter of 2024 — and 10% of Singaporeans owning six cards or more — credit card usage remains a deeply ingrained habit among consumers.

Contactless payments continue to be on the rise in Singapore

2. Digital wallets: Mobile wallets like GrabPay, PayLah!, and FavePay are widely used, particularly by Gen Z. Driven by the younger generation of consumers, the market share of e-commerce sales using digital payments processing providers was already at 32% in 2023. By 2026, digital wallets are expected to overtake credit cards as the most preferred payment method among consumers.
3. Bank transfers: Bank transfers remain a safe and secure option for Singaporeans, especially for transactions where security is a top priority. While only 8% of consumers used bank transfers for online purchases in 2023, this payment method continues to be favoured for its reliability.
4. Buy Now, Pay Later (BNPL): The BNPL sector is growing, with an estimated US$ 3.76 billion in transactions by 2032. BNPL services offering 0% interest align with the shifting consumer behaviours of younger generations who prefer flexible payment options for large purchases.
5. Cash on delivery: Despite the rise of digital payments, roughly a third of Singaporean consumers still prefer cash on delivery (COD) for online purchases, particularly among senior citizens, who often find payment by cash to be their preferred payment method due to security concerns with technology-based payment platforms.

Apart from the variety of payment method preferences, businesses should also consider factors like transaction fees and competitive exchange rates. Understanding these factors and Singaporean consumer behaviours provides better customer experiences and payments with ease.

Emerging payment method trends in Singapore

Singaporeans use digital payment systems more than any other payment method online. In 2022 alone, digital wallets held a 40% market share, overtaking credit cards (36%). E-wallets are projected to achieve a 97.4% market penetration by 2025.

This means nearly all Singaporeans will be using e-wallets by 2025, making digital payment platforms essential for merchants. By integrating mobile wallets and other localised payments, businesses can lower cart abandonment rates, capture more sales, and provide faster and more seamless transactions for consumers.

BNPL is also growing, especially among younger consumers. Millennials, known for being risk-averse in spending, are drawn to BNPL because it offers a flexible and relatively safe way to shop. Some service providers like Atome, GrabPay Later, Rely and Hoolah offer 0% interest instalment plans without processing fees or additional charges. Therefore, Merchants offering BNPL solutions are likely to be more appealing to younger consumers, boosting their revenue by enabling larger purchases to be paid over time.

Innovative solutions like SGQR have further elevated Singapore's payment landscape. By integrating multiple payment schemes into a single system, SGQR simplifies the transaction process for merchants and customers. Whether for in-store transactions or e-commerce and POS payments in APAC and beyond, SGQR supports various local and international options. This unified approach boosts financial inclusion, minimises payment issues, and reduces operational complexity by facilitating cross-border e-commerce payments and transactions.

Key takeaways for international e-commerce businesses

1. Contactless and digital payment methods dominate Singapore's market. Offering solutions like mobile wallets and e-payments will cater to local preferences and is likely to boost sales.
2. Despite the increased popularity in digital payment methods, credit cards remain a popular payment method, especially for online shopping. It is beneficial to ensure your payment systems support major credit cards like Visa and Mastercard as well.
3. BNPL services are gaining momentum, particularly among younger consumers. Offering BNPL options will appeal to this growing segment and encourage larger purchases.

Simplify payment methods in Singapore with Antom

As Singapore's payment ecosystem continues to evolve, it is essential to stay ahead by offering flexible, secure, and customer-friendly payment options to your customers.

Antom offers robust solutions designed to keep up with these changes, integrating popular payment options like credit cards, debit cards, digital wallets, and BNPL across both online and in-store channels.

With support for over 100 currencies across more than 40 countries, Antom can assist with your business needs by simplifying payment processing while improving customer experience. Leverage on Antom's payment solutions to help improve transaction efficiency, reduce cart abandonment rates, and boost customer satisfaction in the highly competitive Singapore market.

Contact us to learn more about payments in Singapore.