Digital wallets are expected to overtake credit cards as the most popular online payment method, with a 40% market share by 2026.
Digital wallets transactions are projected to become the most popular online payment method by 2026, but cards are still king in Singapore.
According to the 2023 Global Payments Report by Worldpay from global financial technology leader FIS, point-of-sale transaction value by digital wallets will increase by 101% from 2022 to 2026. Digital wallets are expected to overtake credit cards as the most popular online payment method, with a 40% e-commerce market share by 2026.
However, as it stands, credit and debit cards combined remain dominant as the preferred payment method in Singapore, at 53% of e-commerce and 57% of point-of-sale market share in 2022.
The report, which has been released annually since 2015 and is now in its eighth edition, found that Singapore’s digital wallet adoption lags behind other Southeast Asian markets, as its more mature economy is heavily influenced by use of credit and debit cards.
Meanwhile, digital wallets take the spotlight with the highest market share in point-of-sale transactions in neighbouring markets like China, the Philippines, Indonesia, Malaysia and Australia.
Yvonne Szeto, vice-president for commercial, Asia-Pacific at Worldpay, says that the prominence of cards in Singapore is a function of consumer habits.
“Credit cards, especially in Singapore is just such an established payment method,” she says. “It’s got a high penetration online… just because the user experience is perhaps a lot easier.”
Echoing Szeto’s sentiments, global payments manager Edward Ong from Vantage Market highlights that Singaporeans are “really good at calculating”, and are able to get a bang for their buck with the current credit card reward system that offers cashback and miles.
But Ong feels that this behaviour will change over time. “When digital wallets start to go into a better rewarding system, I think it will climb eventually,” he adds.
Addressing the future of the payments industry in Singapore, Nagesh Devata, senior vice-president for the Asia-Pacific at Payoneer, highlights the huge number of players that have emerged in this space.
In order for these players to differentiate and standout, they will have to innovate, he adds.
“Things around trust, credibility, security and confidence all become real important factors,” says Devata. “And for us here, it's important how we convey and communicate that message.”