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

Choosing the right payment methods is key to catering to both local and international customers. In fact, availability of payment methods has become so critical to the customer experience that they can directly impact revenue. 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. 

While there is no single best payment type, providing a range of popular payment methods can positively affect your bottom line. 

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

• Fast And Secure Transfers (FAST)

• General Interbank Recurring Order (GIRO) Payment

• MEPS (MAS Electronic Payment System)

• PayNow

• NETS (Network for Electronic Transfer)

• Debit and credit cards

• Digital wallets

• Buy-now-pay-later (BNPL)

Fast And Secure Transfers (FAST)

FAST (Fast And Secure Transfers) is a bank transfer service in Singapore. It lets customers transfer SGD money quickly between banks that accept it, and is the underlying network that powers PayNow.⁷ For businesses, this means near-instant payments and quicker access to funds, improving cash flow and making transactions more efficient. With FAST, businesses can handle payments smoothly and avoid delays, helping them stay on top of their financial operations. 

In 2023, FAST handled approximately 380 million transactions, a notable rise from the previous year and reflects the steady growth of the service.⁸

Benefits: Using FAST offers businesses the advantage of quick and efficient payments. The service operates 24/7, making it convenient to process transactions anytime without waiting for banking hours.

Considerations: While FAST is great for everyday transactions, it may not be ideal for high-value payments. Additionally, businesses should be mindful of any fees associated with frequent transfers. Banks like DBS often provide a limited number of free FAST transactions each month, but charge fees once you exceed that limit. They may also apply processing fees for high-volume transfers, especially for larger or more frequent payments. Choosing FAST depends on your transaction needs and whether the benefits outweigh any potential costs.

General Interbank Recurring Order (GIRO) Payment

GIRO is an automated electronic payment service that allows organisations to debit a recurring payment from customers’ bank accounts. This allows businesses to receive funds on time without manual follow-ups. Customers also benefit from using GIRO because there’s no need to remember due dates or stand in line to make payments. 

There are 2 ways to collect GIRO payments. The first and most popular method is GIRO Direct Debit, where recurring payments are automatically deducted from a customer’s bank account on scheduled dates. There is also GIRO-On-Demand, a service offered by some financial institutions where customers have to manually approve each payment. 

Benefits: Using GIRO to accept payments from customers makes the process smooth and hassle-free for both parties. GIRO Direct Debit ensures that funds are transferred directly to your account on the agreed schedule without delays.

Considerations: While GIRO is great for recurring payments, transactions won’t get processed if the customer does not have enough funds in their bank account. Setting up GIRO requires your customers to authorise the arrangement, which might take some time.

MEPS (MAS Electronic Payment System)

MEPS is a real-time payment system in Singapore operated by the Monetary Authority of Singapore (MAS). It allows businesses to transfer large amounts of SGD securely and instantly between banks. MEPS is mainly used for high-value or time-sensitive transactions. In 2023, MEPS processed 7.24 million transactions, with a total value of S$33 trillion.⁹

Benefits: Using MEPS (MAS Electronic Payment System) to accept payments is ideal for high-value or urgent payments. Payments are processed in real time, ensuring that funds are securely transferred and available immediately.  

Consideration: MEPS is best suited for large payments, so it might not be cost-effective for smaller transactions. Additionally, both the business and the customer need to have bank accounts with participating institutions to use the system. Businesses should assess whether the speed and security of MEPS justify the costs based on the volume and value of their transactions.

PayNow

PayNow is a fund transfer service and payment method that allows customers to pay businesses instantly. PayNow operates on the FAST network, but the two payment methods are clearly distinct. FAST requires entering the recipient’s bank account number, while PayNow lets individuals transfer funds using a mobile number, NRIC,  a business’s Unique Entity Number (UEN) or a PayNow QR code. It’s a convenient way for customers to pay from their bank accounts without manually entering bank details. 

By linking their business account to PayNow Corporate, companies can easily accept cashless payments from one of the most popular payment methods in Singapore.

Benefits: PayNow offers businesses a fast, easy, and cost-effective way to receive money from its 5 million users in Singapore.¹⁰ It’s especially useful for businesses looking to transition to cashless payments without investing in complex systems.

Considerations: While PayNow is excellent for local payments, it’s only available in Singapore, so businesses need to offer additional payment methods to serve overseas customers. It’s also best suited for small to medium-sized transactions, as it may not have the features required for managing high-value payments or batch transactions. 

NETS (Network for Electronic Transfer)

NETS (Network for Electronic Transfers) is an electronic payments provider in Singapore that makes it easy for consumers to pay businesses using debit cards, mobile apps, and QR codes. With a network of 100,000 payment touchpoints across retail stores, food outlets, and online platforms¹⁰, NETS provides a convenient way for businesses to manage everyday transactions. 

Benefits: NETS allows consumers to make cashless payments directly from their bank accounts, which is especially helpful for those who don’t qualify for credit cards. At S$0.80 per transaction, NETS also has lower fees compared to credit or debit card payments, which can range from 2.99% to 3.5%.¹¹ This makes it a great option for both businesses and customers looking for simple and affordable payment solutions.

Considerations: Businesses must invest in physical NETS terminals to accept payments, which can be a challenge for eCommerce businesses. While NETS is excellent for local transactions, its reliance on physical infrastructure and lack of overseas compatibility may limit its usability for certain needs.

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.¹² 42% of eCommerce transactions are also paid through credit cards.¹³

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 wallets or mobile wallets are secure apps or platforms that carry a person’s credit or debit card information, just like a physical wallet. They let customers pay for things online or in-store without their physical cards. 

In 2020, there were 101 million digital wallet payments in Singapore and this figure is expected to rise to 1.1 billion by 2025.¹⁴

These are some of the most widely used digital wallets in Singapore:

• Google Pay is Google's payment platform for consumers. Users can send money, pay for purchases, and earn rewards through linked bank accounts or cards.

• Apple Pay is Apple’s mobile payment service by Apple. It allows users to make secure purchases in stores, apps, and online using their Apple devices. 

• GrabPay is a digital wallet by Grab that lets users pay for rides, food deliveries, and in-store purchases, while earning reward points.

• Samsung Pay is Samsung's digital wallet service. Users can use their Samsung devices to store and use payment cards, loyalty cards, and more.  

• AliPay is a popular digital wallet from China. It allows users to make secure payments, transfer money, and manage finances.

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.

Buy-now-pay-later (BNPL)

BNPL services allow customers to pay in installments over time instead of paying the full amount upfront. There are approximately 1.9 million BNPL users in Singapore, most of whom are between 18 – 34 years old.¹⁵ 79% of Gen Zers and 62% of millennials reported using BNPL services in 2023.

These are some of the most widely used BNPL platforms:

• Atome is a Singapore-based BNPL service that allows consumers to split their purchases into three interest-free payments. 

• Grab PayLater is a BNPL service integrated within the Grab app. It allows users to defer payments for Grab services and partner merchants. 

• Klarna is a global BNPL provider that allows consumers to split payments into 4 installments. It is widely used in North America and the EU, though not available in Singapore. (https://www.klarna.com/international/)

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. It can also help you acquire customer segments like Gen Z or millennials, who are the biggest BNPL users in Singapore.

Considerations: BNPL fees are often higher than other payment methods, costing businesses 4.9% - 6% per transaction compared to 1% for PayNow and 3.3% - 3.6% for credit cards.¹⁶ It also encourages impulse buying, which can lead to more returns or exchanges. 

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. Different payment methods come with different fees charged by your payment gateway provider, which can impact your overall costs. 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. It’s important to understand these fees so you can choose the most cost-effective options and improve your bottom line

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 11 currencies, helping to save on conversion fees. 

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 globally, such as WeChat Pay and Alipay in China, giropay in Germany, and more.

• 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.

• Payment Links. Instantly generate payment links and share the URL or QR code on emails, chat applications, or social media. 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. 

• 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 the markets where you operate. Airwallex’s Global Accounts let you bank like a local business in 60+countries. 

• 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 fast, low-cost international transfers to 120+ countries as though it were a local payment. That’s because Airwallex works with local payment rails, which allows overseas payment to bypass the SWIFT network. 90% of transfers arrive on the same day.

• Borderless Cards. Issue virtual and physical Borderless VISA Cards for free, and enjoy 1% unlimited cashback on all local and international spend (terms and conditions apply). 

• 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.dpi.global/globaldpi/singapore_paynow

8. https://www.statista.com/statistics/1325967/singapore-fast-transactions-volume/

9. https://www.mas.gov.sg/-/media/mas/singapore-financial-centre/why-singapore/meps/statistics/annual_statistics_2023.xlsx

10. https://asianbusinessreview.com/banking-technology/exclusive/how-nets-helping-smes-get-right-data-raise-their-revenue

11. https://www.straitstimes.com/business/banking/nets-now-lets-businesses-accept-visa-mastercard-payments-on-its-terminals

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

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

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

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

16. https://www.airwallex.com/sg/online-payments-capability

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.