Alternative payments gaining traction in Singapore

Alternative payments

Alternative payment methods such as digital wallets and buy now, pay later (BNPL) are catching up to traditional payment cards as the preferred method of payment in Singapore, according to GlobalData.

While payment cards accounted for a 40.1 per cent share in Singapore’s total e-commerce payment value in 2023 alternative methods accounted for 38.6 per cent, creeping up from 27.6 per cent in 2020.

The ongoing popularity of traditional payment cards as the method of choice in Singapore was attributed to various value-added benefits including interest-free instalment options, reward programs, cashback and discounts, according to GlobalData’s 2023 Financial Services Consumer Survey.

“E-Commerce sales in Singapore are growing at a robust pace, supported by high internet connectivity and smartphone penetration, and well-developed payment infrastructure,” Kartik Challa, Senior Banking and Payments Analyst at GlobalData, said.

“The COVID-19 pandemic has accelerated this shift in consumer preference from brick-and-mortar to online channels.

“While payments cards traditionally remain the preferred choice for e-Commerce payments, alternative payments are increasingly gaining prominence with their collective share catching up with payment cards.”

This comes as figures from GlobalData showed Singapore’s e-commerce market grew by 16.9 per cent in 2022 to reach SGD$17.2 billion, with expected growth of 15 per cent in 2023 to SGD$19.8 billion.

“The growing popularity of alternative payment solutions, especially among the millennials, is expected to further accelerate the shift away from payment cards, and these solutions are all set to challenge the dominance of payment cards going forward,” Challa said.