Card payments in Singapore are set to rebound and grow by 10.2% in 2021 due to the improving economic conditions, forecasts GlobalData, a leading data and analytics company.

According to GlobalData’s Payment Cards Analytics, with the reopening of businesses, easing of travel restrictions and ongoing COVID-19 vaccination program, the value of card payments is forecasted to register a compound annual growth rate (CAGR) of 8.2% between 2020 and 2024 to reach S$129.8bn (US$96.5bn) in 2024.

Kartik Challa, Payments Senior Analyst at GlobalData, comments: “While card payments in Singapore have been on a sustained growth during the last few years, the growth was hampered in 2020 due to COVID-19 pandemic. The economic downturn affected consumers’ buying capacity and subsequently affected payments market.”

To contain the COVID-19, Singapore began vaccination campaign in December 2020 with an aim to cover the entire population by the third quarter of 2021. This, along with the roll out of stimulus package worth US$81.8bn (equivalent to 24.8% of country’s GDP), has set the stage for economic recovery.

To support local businesses and increase consumer spending, Visa in August 2020 launched ‘Where You Shop Matters’ campaign encouraging Singaporeans to buy products from local merchants. As part of the campaign, Visa collaborated with online shopping platform Shopee. More than 2,000 local SMEs and Visa card holders were offered discounts while shopping with these merchants.

While card payment was affected during the pandemic, the loss was partially offset by the shift away from cash and towards contactless cards. Singapore has a developed contactless card network with majority of consumers having contactless cards. Contactless is becoming the mainstream payment method in the country, accepted by everyone from large supermarkets to small retailers.

Mr Challa concludes: “Singapore has a developed card payment market with a strong payment infrastructure and high consumer preference for electronic payments. While the COVID-19 pandemic and the subsequent economic downturn have impacted card payments in the last one year, government support and resumption of business activities are expected to bring it back on growth trajectory over the next couple of years.”