Digital payments will push Singapore’s towards a ‘less-cash’ economy

By Our Reporter
Image by Gerd Altmann from Pixabay

The push for digital payments and the fear of coronavirus (Covid-19) spread through the handling of cash are driving the adoption of electronic payments in Singapore, says GlobalData, a leading data and analytics company.

Supported by various government measures to promote electronic payments and robust payments infrastructure, the country will continue to make steady progress in reducing cash usage, with the share of cash in total payments volume expected to decline from 48.3% in 2019 to 39.0% by 2023.

GlobalData’s Payment Instrument Analytics reveals that the number of credit transfers doubled from 61 million in 2015 to 133 million in 2019 while card payments grew from 611 million to 1.2 billion during the same period.

In a bid to further promote electronic payments, the Association of Banks of Singapore introduced a P2P transfer service called PayNow in June 2017, which enables interbank transfers using mobile phone numbers.

Covid-19 will further drive the shift from cash-based payments to digital payment tools

PayNow allows senders to make fund transfers via instant payment platform Fast And Secure Transfers (FAST) using just the recipient’s mobile number or National Registration Identity Card (NRIC) number. In August 2018, the service was extended to corporate customers.

Nikhil Reddy, Banking and Payments Analyst at GlobalData, comments: “The digitalization of transit payments, expanding payment infrastructure, rising electronic payment acceptance among SMEs and growing consumer preference for digital payments will further push Singapore’s move towards a ‘less-cash’ economy.”

Furthermore, with the launch a common QR code standard—the Singapore Quick Response Code (SGQR) in September 2018, QR code-based payments are also increasingly gaining traction and are now widely used for payments. According to the Monetary Authority of Singapore (MAS), over 32,000 QR codes have been deployed across various merchant categories such as retail stores, hawker centers and supermarkets, as of September 2019.

Reddy concludes: “The recent Covid-19 outbreak will further drive the shift from cash-based payments to digital payment tools, particularly non-contact tools such as contactless cards and mobile wallets.”

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