Singapore’s payment cards market is one of the most highly competitive and attractive markets in Asia-Pacific. Singapore’s payment cards market is mature and over served, with credit and debit card penetration rates of 1.7 and 2.0 respectively per inhabitant in 2014. In terms of transaction value and volume, Singapore’s payment cards accounted for 0.6% and 1% shares respectively in the Asia-Pacific region in 2014.
During the review period (2010-2014), Singapore’s payments cards market changed rapidly with the center of innovation shifting from products towards channels and services. Although banks continue to develop new products, this tends to be little more than fine-tuning and modification of existing products. Banks are increasingly using micro-segmentation to attract new customers and encourage customers to spend with their own bank’s cards. Strategies such as personalized card designs and segment-specific promotions and benefits were increasingly used during the review period.
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Electronic payments gaining prominence in Singapore
Electronic payments in Singapore have steadily gained ground, and the country has invested substantially in building long-term infrastructure for cashless payments. Affordable and widely available financial products, a competitive merchant marketplace, and a transparent business environment are strongly connected with progress toward cashlessness.
The advent of contactless technology, mobile payments and chip-and-PIN technology drove the shift towards electronic payments. Contactless payments based on Visa payWave, MasterCard PayPass or NETS FlashPay were launched by several banks during the review period. Similarly, mobile phones supporting contactless payments are already available on the market, and both their number and use are expected to grow further over the forecast period.
Banks introduced one-time passwords (OTP), SMS and email alerts, and replaced magnetic stripe cards with Europay, MasterCard, Visa (EMV) cards to help prevent card fraud. All card-based transactions in the country are processed via EMV-compliant payment cards and card readers. As electronic payments become more widespread, consumer convenience will increase and the inconvenience of handling cash will be reduced.
‘Intelligent Nation 2015’ to support growth in the cards and payments industry
The ‘Intelligent Nation 2015’ (iN2015) master plan, drawn up by the Singapore government, is expected to support to the growth of the cards and payments industry over the forecast period. The program aims to promote electronic payments through increased adoption of near-field communication (NFC) mobile payments with the establishment of an interoperable infrastructure for NFC services.
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By GlobalDataThe government of Singapore earmarked $20.6 bn (SGD26 bn) in investment in the development of infocomm infrastructure under the program, helping to expand electronic and mobile payment platforms in the country.
Alternative payment instruments expected to boost cashless payments
Consumers are increasingly inclined to use faster and more secure payment options, resulting in mobile operators, traditional and online retailers, and other service providers introducing efficient digital payment options.
Digital options including online and mobile payments are being conducted through alternative instruments such as PayDollar, Fastacash, PayPal and MOLPoints. These instruments are not only supplementing traditional cashless payments, but also changing the way consumers and merchants transact. The launch of the MasterPass digital payment platform by MasterCard in June 2014 is expected to further shift consumer focus on digital payments.
Growing prominence for mobile payments
According to the MasterCard Mobile Payments Readiness Index report released in 2012, Singapore was the most advanced market of the 34 countries surveyed, including the US, the UK and China, with a readiness score of 45.6. The country’s highly developed infrastructure, financial system and regulatory structure are the main reasons for its top ranking in this index.
Mobile payments are well established in Singapore, and consumers are very comfortable with various types of electronic payment; many use smartphones to make payments. With technological developments, increased smartphone penetration, a robust mobile banking infrastructure, and banks’ introduction of advanced security measures led to growth in mobile payments in Singapore.
In June 2014, Standard Chartered Bank in partnership with telecoms service provider SingTel introduced the Dash mobile money service, which allows consumers to download cash on their mobile phones directly from their bank accounts. Consumers can use the service to make payments at nearly 20,000 payments points in Singapore.
