12 Feb 2021
Posted in Banking
QR code-based payments gradually displacing cash in Singapore, reveals GlobalData
Singapore has been investing in building infrastructure for cashless payments for a long time, with QR code being one such initiative. As a result, QR payment is increasingly displacing cash among small merchants. Its growing acceptance has even prompted some of the larger merchants, that traditionally focused on payment cards, to begin accepting QR payments, according to GlobalData, a leading data and analytics company.
Ravi Sharma, Lead Banking and Payment Analyst at GlobalData, comments: “QR code has seen exponential growth in merchant adoption in Asia due to its cost-effectiveness and high penetration of mobile wallets. Following the success of Alipay and WeChat Pay-based QR code payments in China, other countries in Asia have also embraced this concept.”
Singapore has high concentration of small and medium-sized enterprises (SMEs). According to the Singapore Department of Statistics, there were 273,100 businesses in the country by the end of 2019, with 99.5% of them being SMEs.
However, despite having a well-developed payment infrastructure, a considerable number of consumers still prefer cash. This is due to limited acceptance of electronic payments among smaller merchants including street vendors, food stalls and hawkers.
To encourage non-cash payments among these businesses, the government along with payment participants is focusing on QR based payments as a viable alternative for cash.
Singapore has seen proliferation of mobile wallets-based QC payments, thereby making merchant stores cluttered with multiple QC codes. To overcome this, the Monetary Authority of Singapore (MAS), in collaboration with Infocomm Media Development Authority (IMDA), launched a unified QR code called Singapore Quick Response Code (SGQR) in September 2018. It combines multiple payment QR codes, thereby eliminating the need for merchants to invest in separate QR code from each provider.
SGQR is now widely accepted across the country at more than 160,000 merchant points. Majority of digital payments in food stalls and stalls hawker centers are now being carried out via SGQR.
According to GlobalData’s Banking and Payments Survey 2020*, mobile wallet adoption is high in Singapore with over 70% respondents having a mobile wallet and using it. This is much higher compared to even some of the developed markets in the west.
Mr Sharma concludes, “Wide SGQR acceptance coupled with rising mobile wallet adoption will accelerate further QR code-based payments in the country.”
*GlobalData’s 2020 Banking & Payments Survey was carried out during Q1 2020. Over 43,000 respondents aged 18+ were surveyed across 44 countries.