As part of its Smart Nation initiative
, the local government has been encouraging businesses, including hawkers in food centres, to adopt different modes of digital payment. In fact, the total transaction of digital payments in Singapore is expected to reach around S$ 28 billion in 2023.
What are digital payments?
In a nutshell, digital payments, or electronic payments, refer to the use of electronic devices (smartphones, smartwatches, tablets, credit or debit cards, and computers) to initiate and process payments. This payment method is becoming increasingly popular due to its speed, convenience, and security features. Digital payments in Singapore are facilitated through a number of platforms, including mobile wallets, online banking, and credit card payments.
Small business owners in Singapore should consider adopting and accepting digital payments to increase sales and improve the overall customer experience. Prospective customers often find it easier and more convenient to make purchases this way. Why do people like digital payments?
Millennials and Gen Zs seem to be leaning towards leading a cashless lifestyle, quickly making digital payment the centre of transaction processes today. According to The Edge Singapore
, global cashless payment volumes are expected to increase by more than 80% from 2020 to 2025. Digital payments, with their convenience and efficiency, are swiftly becoming the de facto payment mode for them.
Traditional payment methods like cash and cheques are susceptible to theft and fraud. Digital payments, on the other hand, offer enhanced security to combat the risk of counterfeit money and theft. Transactions made online are not easily traceable and identified—which, in turn, promotes transparency— they are also encrypted or come with other security features to protect personal and financial information. Additionally, consumers appreciate how they can monitor their payments conveniently on-the-go via mobile apps.Types of digital payment
From mobile payments to online banking, several types of digital payment are used in Singapore. Here are some of the popular few:
Thanks to technological advancements, smartphones today are better equipped to initiate and process payments. You can make these mobile payments through e-wallets. These digital or virtual wallets allow one to store and manage digital currency or payment information online. From sending money to friends to making purchases, consumers can leverage e-wallets to complete daily chores and tasks.
Forecast figures on Singapore's mobile wallet penetration rate are expected to skyrocket
, from 30.4 per cent in 2020 to 94.7 per cent in 2025. In contrast, both Singapore and Malaysia are seeing a clear decline in cash usage
, reports Channel News Asia. Some popular e-wallets in Singapore include GrabPay, PayPal, AliPay, and Google Pay.
2. Online banking
Many banks in Singapore offer online banking services that allow users to make payments, transfer money, and pay bills through their bank accounts. Online banking is often integrated with mobile banking, making it convenient for users to manage their finances while on the go.
3. Credit and debit cards
Credit and debit cards are still widely accepted in Singapore, and most banks offer their own mobile banking applications that allow users to make and monitor payments using their cards. Some cards also come with perks, encouraging more use as consumers receive incentives with everyday purchases. Some popular credit and debit card providers in Singapore include Visa, Mastercard, and American Express.
New-fangled e-payments are on the rise too. Rewards and payment platform ShopBack’s own payment function allows consumers to leverage the brand’s mobile application to complete purchases, whether for a meal at a restaurant or products over the counter. In doing so, consumers are incentivised with a return cashback, encouraging them to commit to repeat purchases. In doing so, this e-payment helps brands drive customer loyalty and promote customer retention.
5. Buy Now Pay Later
Otherwise known as BNPL, this unique digital payment, which allows individuals to make purchases and pay via interest-free instalments, is rising amongst younger consumers.
ShopBack PayLater’s model splits customers’ purchases into 3 interest-free instalments, which the customers can pay their dues monthly. This makes big-ticketed items like television, furniture or travel-related expenses affordable and accessible to a wider group. Furthermore, customers can also leverage cashback earned sitewide on ShopBack to offset their total bill, hence reducing the upfront cost when making a purchase. Merchants, who adopt ShopBack PayLater, also do not have to worry about any onboarding fees and extra charges. They can also make use of the rewards and payment platform’s fueled promotional strategies to gain new customers.