Payment infrastructure growth to facilitate cashless transition in Singapore, forecasts GlobalData

Singapore has a well-developed payment market, supported by robust payment infrastructure. The country’s developed point of sale (POS) infrastructure is complimented by QR code payment, which is now increasingly preferred by consumers as a safer payment method for cashless transition, says GlobalData, a leading data and analytics company.

An analysis of GlobalData’s Payment Cards Analytics reveals that the number of POS terminals in Singapore is set to increase from 341,309 in 2021 to 393,544 in 2025.

Ravi Sharma, Lead Banking and Payments Analyst at GlobalData, comments: “With 60 POS terminals per 1,000 individuals in 2021, Singapore led the Asia-Pacific region. The government is also playing its part to further drive the acceptance of electronic payments among merchants.”

Productivity Solution Grant is one such initiative, through which the government provides subsidy for POS installation. The subsidy was raised from 70% to 80% between April 2020 and March 2022 to promote cashless payment during the COVID-19 pandemic. From 1 April 2022, this will be reduced back to 70%.

In addition to POS infrastructure, QR code and other mobile-based payments acceptance is gaining prominence among smaller merchants due to their cost-effectiveness.

Singapore is home to large number of small merchants and hawkers, who rely on cash transactions. To encourage digital payments among them, the Monetary Authority of Singapore launched interoperable unified QR code standard called Singapore Quick Response Code (SGQR) earlier in 2018.

SGQR allows merchants to save significant amount in payment acceptance costs, by eliminating the need to invest in separate QR code from each provider or installing traditional POS terminal.

There has been significant rise in the adoption SGQR among merchants, with the number of merchant acceptance points increasing from 42,000 in 2019 to 260,000 in September 2021. As a result, around 75% of merchants in Singapore accept payment via SQGR code.

To push SGQR adoption, ‘Hawkers Go Digital’ program was launched in June 2020. As a part of this, the government is bearing transaction fees on SGQR payments until 31 December 2023. In August 2021 alone, 11,600 stallholders across hawker centers, coffee shops and canteens made around two million digital transactions, and 94% of them were via SGQR.

Sharma concludes: “Singapore has always been at the forefront of payment innovation. The introduction of SGQR and rising adoption of contactless payments are supporting digital payments growth, thereby supporting Singapore government’s vision to become a ‘less-cash’ society.”

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