Singaporean consumers are forming new digital payment habits due to the Covid-19 pandemic, according to a recent study conducted by Visa. Their Consumer Payment Attitudes study found that contactless payment is the most preferred payment method amongst Singaporeans (31%), followed by online card payments (23%). Less than one in five Singaporean consumers (15%) prefer using cash.
In Singapore, contactless card payments have been found to be the preferred payment method across the majority of categories — led by supermarkets (45%), retail shopping (42%), as well as petrol or gasoline (42%). Online card payments are also most preferred for categories such as bill payments (49%), overseas travel (49%), and education (36%). Cash continues to dominate for categories such as food and dining (54%), convenience stores (51%), and taxis and ridesharing (34%).
Other emerging trends that Singaporean consumers have shown interest in include real-time payments for bill payments (80%), transferring money to family and friends (78%), making retail purchases (72%), and international money transfers (60%).
“The stickiness of new digital payment habits formed during the pandemic cannot be underestimated. Our study found that consumers expect the pandemic to have accelerated Singapore’s transition to a cashless society by at least four years,” comments Kunal Chatterjee, Visa Country Manager for Singapore & Brunei. “Singapore is an advanced market and the payments infrastructure is extremely developed in this region. Today, more than nine in 10 Visa transactions made by Singapore consumers are contactless payments and this milestone is one of the highest in the world. With cash usage decreasing, we believe there is a significant opportunity to encourage more usage of digital payments in the country. We will continue to work with our partners to make payment experiences accessible to all through our global network.”
While not the most widely used among Singaporean consumers, online wallets, mobile contactless payments, and QR code payments have seen a significant increase in usage due to the pandemic. Among those who indicated they were avid users of QR code payments, 50% now use this payment solution more frequently. Over two in five (42%) of consumers with a preference for online wallets and one in three (37%) who prefer mobile contactless payments increased their usage of the respective payment methods.
Based on the study, online wallets saw the biggest increase in usage for purchases at supermarkets (63%), food and dining (61%), and retail shopping (57%). QR code payments also saw the largest increase in usage at convenience stores (57%), while the usage of mobile contactless payments increased significantly for taxis and ridesharing (48%).
“Based on the study, the top categories that see highest QR code payment usage include food & dining and ride-hailing & taxi payments. We believe that as QR code payments acceptance increase, there may be more opportunities for Singaporeans to use this payment solution, including non-face-to-face category purchases,” added Kunal.
The pandemic has also decreased the usage of cash by consumers in Singapore across many categories, most notably public transport (45%), and health and fitness (42%). Overall, more than one-third of Singaporean consumers who prefer using cash (35%) used this payment method less frequently.
Singaporeans are also receptive to emerging payment trends. Installment payments are well known among Singaporean consumers (87%) and have seen moderate conversion and acceptance rates in the past two years (38%). However, many consumers do not use this method because they can easily pay for their purchases in full (67%). With the emergence of fintechs offering “buy now pay later” solutions, accompanied by attractive rewards, the usage of installment payments among consumers in Singapore is likely to grow.