Singapore is a mature payment card market with the average Singaporean holding more than three cards. Boosted by the government’s push towards a cashless society, growing consumer awareness and improving payment infrastructure, card payments in Singapore is set to grow from S$111.9bn (US$82.1bn) in 2019 to S$158bn (US$116bn) in 2023, according to GlobalData, a leading data and analytics company.
GlobalData’s Payment Cards Analytics reveals that Singapore’s payment card market is mainly driven by credit cards, which accounted for 60% share by value in 2019. Credit card payments recorded a strong CAGR 10.1% over 2015-19.
Nikhil Reddy, Banking and Payments Analyst at GlobalData, explains: “The high preference for credit card is also driven by pricing benefits and value added services associated with these cards, which include reward points, promotions, discounts and installment facilities.”
Singapore’s nominal GDP per capita of $63,762.89 in 2019 is one of the highest in the world. Most banks in Singapore offer private banking services to customers along with complimentary credit cards. High-income individuals traditionally favor credit cards for payments, which better suits their wealthy lifestyle, and banks are happy issuing credit cards targeted at this demographic which is less risky and highly profitable.
Increasing adoption of contactless cards will also propel growth in card payments. From April 2019, the Land Transport Authority (LTA) enabled commuters to make contactless payments at Mass Rapid Transit (MRT) or bus rides using Mastercard contactless credit and debit cards. This service was made available to Visa cardholders from June 2019, and extended to Network for Electronic Transfers (NETS) contactless cards in November 2019.
Reddy concludes: “Rising adoption of contactless cards will further push the shift towards a cashless society and drive growth of card payments in Singapore.”