After dipping during the pandemic, Singaporean consumer spending bounced back to a record high this year. Singaporean consumers, who enjoy a higher spending power than their regional neighbours, spent S$48.24 billion ($35.93 billion) in the third quarter of 2023.1
These consumers relied on a variety of payment methods - both traditional and digital - to purchase products and services online.
While credit cards continue to top the list of popular Singapore payment methods, digital wallets are expected to dethrone them by 2026.2
Growing digital wallet usage has been attributed to the city-state’s high smartphone penetration rate,5 more than 95%,6 and the associated surge in mobile app use. Moreover, nearly 99% of Singaporeans have internet access.
All these factors and government support are making Singapore a fertile ground for the growth of digital payment methods.
Join us as we delve into Singapore’s preferred payment methods, the latest payment trends and how eCommerce is changing the nation’s payment landscape.
Table of contents:
- Fast Facts About eCommerce in Singapore
- eCommerce Growth in Singapore
- Singapore Payment Trends and Popular Payment Methods
- 5 Most Popular eCommerce Payment Methods in Singapore in 2023
- Final Thoughts
Fast Facts About eCommerce in Singapore
- The digital economy contributed more than 17% of Singapore’s gross domestic product (GDP) in 2022.7
- Singapore’s eCommerce market is projected to grow by 15% to reach $20 billion In 2023.8
- The COVID-19 pandemic accelerated the adoption and growth of eCommerce in Singapore.
- Credit cards and debit cards are currently Singaporeans most preferred payment methods, accounting for a combined 53% of eCommerce transactions.
- Alternative payment methods, including mobile and digital wallets, account for almost 38.6% of online payments in Singapore’s eCommerce space in 2023.
- Popular brands in the alternative payment methods include Apple Pay, Google Pay, and PayPal.
- As of 2022, 62% of cross-border eCommerce in Singapore was from China.9
- Credit cards are the most popular payment method for cross-border eCommerce purchases, while payment service provider PayPal closely follows in second place.10
- Singapore leads the global transition to mobile commerce.11
eCommerce Growth in Singapore
The city-state is the world’s 47th largest eCommerce market, with a projected revenue of $5.17 billion in 2023.12 This figure is expected to hit $6.69 billion by 2027.
Meanwhile, eCommerce entrepreneurs contributed about $2 billion to Singapore’s GDP in 2022, with Shopify's Entrepreneurship Index noting that these entrepreneurs' export transactions were worth $1.18 billion.13
All of Singapore's best-selling products are available online,14 with 63% of Singaporeans preferring to buy from online vendors.15
Multiple reasons are driving the explosive growth of Singapore’s eCommerce industry, including continued digital infrastructure development, high internet penetration, the rise of smartphones, the expansion of 5G, the introduction of digital technologies, and government initiatives.
The Singapore government plans to make the country a regional and global eCommerce hub.16 To achieve that, it is expanding the 5G network as well as digitising small to medium enterprises (SMEs).
Singapore Payment Trends and Popular Payment Methods
Singapore social media stats highlight the immense popularity that such apps enjoy in the city thanks to the high level of mobile penetration.17 The country has one of the highest smartphone adoption rates in the world, at around 95%, with that figure projected to top 99% within the next two years.6
It's hardly surprising, therefore, that mobile payment apps have also surged in popularity.
The Singaporean government’s support is also underpinning the transition to digital payments. The vision of the Monetary Authority of Singapore, the city-state’s central bank and financial regulatory authority, is to create an e-payments society.18
Some of Singapore’s recent payment trends include:
- A significant increase in the adoption of e-wallets, which are expected to reach a market penetration of 97.4% by 2025.19
- The popularity of buy now, pay later (BNPL) is surging, as it allows customers to pay for services or goods over time.20 The country introduced a BPNL code of conduct in 2022 to protect consumers from taking on too much debt.
- Singapore Quick Response Code (SGQR) is the world’s first unified payment QR code; it combines multiple payment schemes into a single SGQR label.21
- An increase in alternative payment methods is leading to financial inclusion.
5 Most Popular eCommerce Payment Methods in Singapore in 2023
The five most popular eCommerce payment methods catering to the diverse preferences and needs of Singaporean consumers are:
Credit Cards are most preferred method for eCommerce payments in Singapore, accounting for 42% of total eCommerce payments.4
Almost everyone uses credit cards in Singapore. More than 73% of consumers have at least one credit card, while about 6% own six credit cards.21 Consumers continue to use credit cards for eCommerce transactions because of their legacy positioning, with some commentators describing this as a “function of consumer habit”.4 Breaking habits is never easy.
Credit cards are also the preferred payment method because they help Singaporeans build their credit scores, earn reward points, and gain cashback and discounts.22
Older generations prefer to make card payments than millennials or Gen-Z.
Millennials and Gen-Z use digital wallets and digital payment systems more than other payment methods to buy online. Contactless payment methods, such as Apple Pay and Google Pay Wallet, are favoured over other payment methods because of convenience, simplicity, secure transfers, and speed.
One study in 2022 found that the share of digital wallets was higher than that of credit cards, accounting for nearly 36% of all online transactions.2 By 2026, digital wallets will take over credit cards as the most preferred payment method.
Gen-Z may not have any experience using traditional payment methods, and it is one of the main demographics that is driving the rapid adoption of e-wallets.
Bank transfers, also known as electronic funds transfers (EFTs), allow payments to be made from a customer's bank account to the merchant's bank account. Despite the growing popularity of digital wallets and other payment methods, both consumers and merchants continue to use this method.
Bank transfers are safe, secure and convenient. An estimated 98% of adult Singaporeans have a bank account, and nearly 9% of Singaporean consumers use account-to-account payments to make online purchase.23
Buy Now, Pay Later (BNPL)
The buy now, pay later (BNPL) option enables consumers to buy even when they're short on money. For example, consumers can order groceries from an online grocer without paying the total up-front payment.
This alternative payment method allows them to break down their payments into instalments at 0% interest. It's also a secure payment method.
Singapore’s BNPL market size was an estimated $1.22 billion in 2022, with this figure projected to reach $3.76 billion in 2032.24
Payment service providers in Singapore know that many younger consumers have embraced BNPL as their preferred payment method. It allows them to buy high-value products, such as laptops, games, and smartphones, even when they cannot immediately pay for them.
Cash on Delivery
While Singapore continues to move towards a paperless economy, some consumers still choose cash on delivery. This payment method lets them pay for goods only after they receive them.
Cash is still “king” for many of Singapore’s senior citizens, who prefer it over other technology-based payment methods.25 Security concerns are one of the reasons for that.
For home delivery services, such as online food deliveries, 23% of the respondents in a 2021 survey said cash on delivery was their preferred payment method.26
Singapore’s eCommerce scene is experiencing explosive growth thanks to the country’s mature digital infrastructure, high internet and smartphone penetration, and government support.
The COVID-19 pandemic, which confined people inside their homes, also changed many consumers’ behaviour and sped up the adoption of online purchases of goods and services. It also led to the rise of contactless payments.
E-wallets, or mobile wallets, are increasingly being preferred by Singaporean consumers. But, there are still a large number of people who use other payment methods, such as credit cards and cash on delivery. While consumers will continue to use them, mobile payments are the future of Singapore’s eCommerce space.
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- Singapore: consumer spending 2023 | Statista
- Digital wallets on track to be Singapore’s top online payment method by 2026 | Asian Banking & Finance
- Singapore eCommerce Market Trends and Statistics in 2023
- Cards are king when it comes to making payment in Singapore: Report
- The Rise of E-wallets: Transforming Business Payments in Singapore's Retail Landscape
- Singapore: smartphone penetration rate | Statista
- Singapore's digital economy – from e-commerce to social media – nearly doubled in five years
- Alternative payments account for nearly 40% of e-commerce transactions in Singapore, reveals GlobalData
- Market share of cross-border e-commerce Singapore 2022, by country
- Methods of payment preferred for cross-border purchases Singapore 2022
- Singapore leads in global transition to mobile commerce
- eCommerce Market Singapore - Data, Trends, Top Stores | ECDB.com
- Singapore e-commerce generated $2b of Singapore's GDP in 2022: report
- Best-Selling Products in Singapore 2023
- Majority of SG consumers want to shop more online | Singapore Business Review
- Singapore Announces Strategy for E-commerce Industry: Potential for Global and Regional Hub
- Singapore Social Media Statistics and Facts 2023
- Popular Payment Methods in Singapore: What Consumers Want
- The growing popularity of ‘buy now, pay later’ in Singapore
- Singapore Quick Response Code (SGQR)
- What Is Cashback and How Cashback Works 101
- Singapore: e-commerce payment methods 2022 | Statista
- Singapore Buy Now Pay Later (BNPL) Market Size, Forecast to 2032
- Cash is still king in Singapore as reluctant elders shun mobile apps
- Methods of payments used for home delivery services among consumers in Singapore