Payment methods guide for Singapore

Singaporeans have well and truly embraced digital payments and eCommerce. The country has the highest adoption rate of cashless payments in Southeast Asia¹ with 97% of consumers using cashless payments at retail point-of-sale.² About 27% of Singaporeans also make online purchases at least once or twice per month.³ 

As digital payments surge and cash usage declines, it’s become clear this shift in behaviour is here to stay. To keep up with changing consumer preferences and avoid losing out on sales, businesses in Singapore need to offer a variety of payment methods preferred by local and international customers. If you have overseas operations, it’s also helpful to know what payment methods are popular in the markets where you operate.

In this guide, we offer an overview of various global payment methods and explore the most popular ones in Singapore. We’ll also share practical advice on choosing the best options, and the key questions you need to ask payment processors so you can receive payments efficiently. 

What is a payment method?

A payment method is a process or tool that facilitates the transfer of funds from a customer to a business. In recent years, the way funds are transferred within Singapore has changed dramatically, with 1.8 million people using mobile wallets⁴ and 5 million people registered for PayNow, the near-instant peer-to-peer transfer service that lets consumers send bank payments to individuals and businesses via UEN, mobile number or NRIC.⁵ 

Global transactions are also on the rise, with estimates suggesting the global cross-border eCommerce market will reach USD$7.9 trillion by 2030.⁶ Understanding the different payment methods is an essential first step to making sure your business is meeting consumers where they’re at and providing the best possible payment experience. 

Popular payment methods in Singapore 

Payment methods are different ways for customers to pay for products and services. For brick-and-mortar businesses, these include point-of-sale (POS) terminals, QR code payments, or contactless payment apps. Online businesses can also accept a variety of payment methods like cards or mobile payments through payment gateways.

The availability of payment methods for online and brick-and-mortar businesses have become so critical to the customer experience that they’ve been shown to directly impact revenue. In fact, the Airwallex research report by Edgar and Dunn found out that 77% of consumers claim they will likely abandon their cart if their preferred payment method is unavailable. So, while no one payment type is best, offering the most popular payment methods can have a positive impact on the bottom line. 

Here are some of the most popular payment methods in Singapore: 

Debit and credit cards

Debit and debit cards continue to be a leading payment method in Singapore, with card payments (97%) overtaking cash (82%) in 2023, according to a study by VISA.⁷ 42% of eCommerce transactions are also paid through credit cards.⁸ Major card networks in Singapore include Visa, Mastercard, and American Express. Consumers and businesses can get cards issued from banks in Singapore like DBS, as well as fintech firms such as Airwallex, Wise, and YouBiz. 

Benefits: Most businesses accept debit and credit cards, making them convenient payment options for businesses and consumers. Card payments facilitate quick and easy transactions, and come with useful features such as tap-and-go. 

Considerations: Every card transaction comes with a cost, with card payments attracting fees charged by the card issuer, the card network, and the payment processor. While you can’t avoid these fees altogether, you can minimise them by selecting the right payment processing partner and passing a portion on to customers as a surcharge.  

Digital wallets 

Digital wallet payments are a form of contactless card payment carried out on a mobile device, such as a smartphone or smartwatch, using digital wallets like Apple Pay, Google Wallet, and Samsung Pay. Homegrown mobile payment platforms like PayLah, GrabPay, and SingTel Dash are also types of digital wallets.

In 2020, there were 101 million digital wallet payments in Singapore and this figure is expected to rise to 1.1 billion by 2025.⁹ 

Benefits: Digital wallets offer ease, speed, and convenience. For consumers, setting up a digital wallet is as easy as adding credit card details to a digital wallet app, allowing them to make purchases by simply tapping their device. Digital wallets offer additional security features, such as fingerprint or PIN verification. 

Considerations: To accept digital wallet payments physically, your business needs a point-of-sale (POS) system to process this payment type. If you operate a brick-and-mortar store, this may involve renting a compatible EFTPOS machine or downloading an app onto a mobile phone. Online businesses need a payment gateway that will accept digital wallet payments.

Bank transfers

Bank transfers, including PayNow, are commonly used for personal and business transactions. Nearly 5.5 million bank accounts are registered with PayNow and its transaction volume reached SGD 46 billion in 2021.¹⁰  

Benefits: Direct transfers between banks are known for their high levels of security, so they are generally considered safe and reliable. They are also suited to larger transactions as they generally have larger limits than other payment methods. 

Considerations: PayNow transfers in Singapore are instant, but other bank transfers take more time. Depending on the banks involved, domestic transfers can take a few hours, while international transfers can take several days. They are also subject to the operational hours of banks and don’t provide instant confirmation of payment, making them less convenient than other payment options. 

Buy Now, Pay Later (BNPL)

BNPL services such as Atome, Grab PayLater, and Klarna, allow customers to buy now and pay in instalments over time, instead of paying the full amount upfront. There are approximately 1.9 million BNPL users in Singapore¹¹, most of whom are between 18 - 34 years old. 79% of Gen Zers and 62% of millennials reported using BNPL services in 2023. 

Benefits: Offering flexible payment options can appeal to customers who prefer to spread out payments over time, which can be particularly useful for larger purchases. This can help attract more customers, increase sales, and improve the overall customer experience. 

Considerations: BNPL fees are often higher than traditional payment methods and typically include a percentage of the transaction value. BNPL can also contribute to customer debt issues and may present a reputation risk for ethical brands. 

How do I choose the right payment methods for my business?

Offering the right payment methods helps facilitate smooth transactions, keeps your customers happy, and drives business growth. Here are some key things to keep in mind when choosing the right payment methods for your business:

Understand your customer's preferences

Knowing how your customers prefer to pay is the first step in choosing the right payment options. We’ve covered the most popular payment methods in Singapore, but each market will have their preferred payment services. To gain a better understanding, you can:

• Ask your customers directly - Run surveys, polls, or incorporate questions into your customer service interactions to ask your customers about their preferences. 

• Analyse purchase history - Mine your past transaction data to identify popular payment options. Consider other data points such as abandoned cart and value per transaction data to gain a deeper understanding of potential missed opportunities. 

• Consider market demographics - Review reputable research that shares payment preferences across demographics, purchase type, adoption rates. 

Compare fees and costs 

Managing and minimising payment processing fees is essential for businesses looking to protect their operating margin. When evaluating your payment methods options and providers, you’ll need to consider the financial implications of transaction fees, currency conversion fees, rates, termination fees, settlement times, set-up costs, maintenance, and more. 

We’ve provided a detailed list of the top 5 digital payment solutions and services in 2024 to help you get started with your comparison. We also have comprehensive guides for popular payment gateways like Shopify payments and Stripe payments. Notably, Airwallex’s payment gateway offers unique benefits, such as like-for-like settlement in over 10 currencies, helping to save on conversion fees. Additionally, it provides the ability to bundle pricing with other payment products, making it a cost-effective and ideal choice for businesses of all sizes.

Review security and fraud protection measures

With the rise of high-profile data and security breaches in recent years, it’s no wonder security is top of mind for businesses and consumers alike. To mitigate risks of financial loss, legal consequences, and reputational damage, businesses need to offer payment methods that offer the highest standards of security. The three main pillars of safe payments to consider are:

• Authentication - This verifies the identities of parties in a transaction using methods like the CVV code and multi-factor authentication to prevent card fraud.

• Confidentiality - This ensures customer data and card details are kept private during transmission and storage, primarily through encryption.

• Integrity - This guarantees the accuracy and trustworthiness of transaction data, using methods like digital signatures and secure protocols to prevent tampering.

Consider integration with your existing systems

The payment methods you choose should seamlessly integrate with your current business systems, including your eCommerce, accounting, marketing, sales, and inventory systems. With the right payments processing provider supporting seamless integrations, you can:

• Automatically sync, reconcile, and categorise transactions and make it easier for your customers to pay you worldwide.

• Streamline order data and inventory management.

• Allow global customers to pay in their preferred currencies and payment methods.

• Start automating common processes without coding.

Offer multiple payment methods

The availability of multiple payment methods has become part of creating an easy checkout experience. Offering a variety of payment methods such as PayNow, Apple Pay, Alipay and Atome helps improve the payment experience by allowing:

• The flexibility for consumers to choose their preferred payment method.

• Alternative options if one method fails or isn’t suitable.

• A convenient, smooth, and hassle-free purchase experience. 

What questions should you ask when choosing a payment methods provider?

To find a payments processing provider that aligns with your business needs, it’s important to ask the right questions and get a clear understanding of what you’re signing up for. Here are some key questions you can ask to help you make an informed decision:

1. What are the fees and costs involved?

Ask about transaction fees, monthly charges, setup costs, conversion fees, hidden charges, and early termination fees to understand all potential costs. These details can significantly impact the bottom line, as was discovered by Singaporean PC company Dreamcore. By partnering with Airwallex, the business was able to save 5% per transaction with the Airwallex Payment Gateway and bundled pricing. 

2. How secure are your payment methods?

Since handling credit card payments involves sensitive information, ask about the provider’s security policies, fraud prevention measures, authorisation rates, and compliance standards to protect your customers' data.

 3. What payment methods do you support?

Check that the payment processing provider can offer the payment methods your customers want. If you sell in overseas markets, you can quickly gain your customers’ trust by offering local payment methods and pricing in local currencies. Airwallex’s payment gateway supports payments in 180+ currencies and 160+ local payment methods, including GrabPay in Southeast Asia and ACH in the USA. Also, consider your longer-term business goals and payment methods trends, and whether the payments processing provider can cater to these changes. 

4. How does your system integrate with the software we currently use? 

Seamless integration with your existing software is crucial for efficient operations and smooth payment processing. Find out what is involved in set-up and maintenance, and what skills you will need in your business to manage this. 

5. What is the transaction speed and reliability?

The speed of fund settlement impacts cash flow, so ask how long it typically takes for transaction funds to be deposited into your account. Learn more about their reliability and how they handle any transaction disputes. 

6. What kind of customer support do you offer?

Effective customer support is essential for resolving payment issues quickly. Key aspects to ask about customer support include:

• Availability - is customer support available often?

• Support channels - what channels are available? For example, phone, email, and live chat.

• Response time - What is their average response time for resolving issues?

7. How do you handle refunds and chargebacks?

Efficient refund and chargeback management is vital for maintaining customer trust. Learn about the provider’s process for managing chargebacks and whether they offer support or protection, which can help mitigate future losses.

8. What additional features do you offer?

Your payments processing partner should offer more than basic transaction data. Providers that offer additional features like analytics, reporting tools, or marketing insights can help you add value across your business to improve the customer experience, streamline inventory management, save on unnecessary conversion through like-for-like settlement, and more. 

How does Airwallex help businesses with their payment methods?

At Airwallex, we accept payments for your business from customers worldwide via their preferred payment methods, with no coding required. 

Here’s why our customers choose our Payment Gateway as their preferred payment processing provider:

• Support for 160+ local payment methods in APAC (e.g. WeChat Pay and Alipay in China), Europe (e.g. giropay in Germany), the UK (e.g. PbBa), and the USA (ACH direct debit).

• Like-for-like settlement in 11 currencies. Collect and hold payments in AUD, CAD, CHF, EUR, GBP, HKD, JPY, NZD, THB, SGD and USD. Businesses can hold these funds in your Airwallex multi-currency account and pay out to suppliers in the same currency without unnecessary conversion into SGD.

• Market-leading conversion rates. When you accept payments in a currency that isn’t supported by like-for-like settlement, we'll convert it to your default currency at friendly interbank exchange rates, for a small fee.

• Payment links. Instantly generate payment links and share the URL or QR code on emails, chat applications, or social media. You can receive payments from anywhere in the world, in any currency. See how Wine Kin elevated their customer experience through Payment Links.

• Flexible integration methods. Our payment gateway integrates easily with your existing eCommerce platform, mobile app, or website. We have no-code plugins for leading eCommerce platforms, hosted payment page, pre-built UI components, and building directly on the Airwallex API or mobile SDKs. 

• Invoice payments. Accept payments on invoices generated through accounting software like Xero and Netsuite.  

• Proven track record - We’re trusted by over 100,000 businesses to help them manage their global payments and finances.  

Airwallex also comes with an all-in-one Business Account that makes it easy to run a global business. You get access to the following benefits at no extra cost:

• Multi-currency Global Accounts. No need to create a bank account in markets where you operate. Airwallex’s Global Accounts let you bank like a local business in multiple countries and regions. It comes with a dedicated account number along with a local branch and bank code, so you can receive, hold, and spend foreign currency without unnecessary conversion. 

• Market-leading exchange rates. Airwallex gives you access to interbank exchange rates - the real exchange rates banks use to trade currency, minus the hefty markup.

• Fast, low-cost international transfers. Airwallex lets you make international transfers to 110+ countries as though it were a local payment. That’s because Airwallex works with local payment rails in economic territories like the EU, which allows overseas payment to bypass the SWIFT network. For you, this means low fees and clearing times as fast as 1 business day. 

• Borderless Cards. Issue unlimited virtual and physical Borderless VISA Cards for free. These debit cards can be used wherever VISA is accepted,and help your employees pay for social media ads, business travel, and other expenses using the currencies in your Airwallex account. Misuse is easily prevented through real-time expense monitoring and custom controls.

• Automated bill payments. Save time paying bills, employees, and suppliers. Send batch transfers for up to 1,000 recipients across countries, currencies, and transfer methods.

Curious to see how it all works? Sign up for your free Airwallex account to learn how we can help you offer your customers the payment methods they prefer and grow your business internationally. 

FAQs about payment methods

1. What are the popular payment methods in Singapore?

Popular payment methods in Singapore include credit and debit cards, direct bank transfers like PayNow, mobile wallets like ApplePay, and Buy Now, Pay Later (BNPL) services like Atome and Grab PayLater.

2. How quickly can I set up a payment method?

The time taken depends on the payment method and payment gateway provider chosen. Digital wallets can often be set up within minutes to a few hours while integrating a new credit card processor or setting up bank transfers might take a few days to a week. Online payment platforms such as Airwallex streamline this process, offering fast and efficient setups for your business. 

3. Is it expensive to set up a payment method?

The cost of setting up a payment method varies based on the provider and services needed. While digital wallets and online payment platforms have minimal setup costs, integrating credit card processors or comprehensive payment solutions may include initial setup fees and ongoing transaction charges. Airwallex offers competitive pricing and cost-effective solutions for setting up different payment methods for your business.

Sources

1. https://www.statista.com/statistics/1234061/sea-cashless-payments-adoption-rate-by-country

2. https://www.channelnewsasia.com/singapore/e-payments-cashless-options-elderly-big-read-3502661

3. https://www.statista.com/statistics/1332612/singapore-frequency-of-online-purchase/

4. https://www.statista.com/statistics/1445919/singapore-mobile-wallet-users/

5. https://fintechlab.nus.edu.sg/singapores-payments-industry-the-way-forward-in-2023/

6. https://www.statista.com/statistics/1296796/global-cross-border-ecommerce-market-value/

7. https://www.visa.com.sg/about-visa/newsroom/press-releases/card-payments-overtake-cash-usage-in-singapore-visa-study.html

8. https://www.straitstimes.com/business/cards-are-king-when-it-comes-to-making-payment-in-singapore-report

9. https://www.statista.com/statistics/1325924/singapore-mobile-wallet-transaction-volume/

10. https://www.channelnewsasia.com/singapore/e-payments-cashless-options-elderly-big-read-3502661

11. https://www.statista.com/statistics/1445925/singapore-number-of-bnpl-users

This publication does not constitute legal, tax, or professional advice from Airwallex nor substitute seeking such advice, and makes no express or implied representations / warranties / guarantees regarding content accuracy, completeness, or currency. If you would like to request an update, feel free to contact us at [[email protected]]. Airwallex (Singapore) Pte. Ltd. (201626561Z) is licensed as a Major Payment Institution and regulated by the Monetary Authority of Singapore.