Digital wallets are poised to overtake credit cards to become the most popular online payment method in Singapore by 2024 amid the e-commerce boom fuelled by the pandemic.
Their soaring popularity has come largely at the expense of credit cards, bank transfers and cash on delivery, according to a new report.
It found that credit cards were the most popular online payment method last year at 45 per cent, with digital wallets at 20 per cent and bank transfers at 12 per cent.
Digital wallets such as GrabPay and DBS PayLah! are expected to account for 27 per cent of the Singapore market by 2024, in line with global trends, said the report.
Globally, digital wallets remain the payment method of choice among e-commerce consumers, accounting for 44.5 per cent of e-commerce transaction volume last year. Chinese consumers lead the way, with digital wallets accounting for 72.1 per cent of e-commerce purchases.
Singapore's e-commerce market reached US$7 billion (S$9.3 billion) last year, and is projected to grow 40 per cent in the next four years.
"Digital wallets have been on the rise for years but have accelerated amid the Covid-19 pandemic," said Mr Phil Pomford, Asia-Pacific general manager of Worldpay Merchant Solutions at FIS, which compiled the report.
Digital wallets are also capturing greater consumer loyalty for in-store purchases. They are expected to account for 20 per cent of the point-of-sale market by 2024, noted the report.
Credit cards remain the preferred in-store payment method, accounting for 38 per cent of transactions last year, and are projected to retain this share through to 2024. Cash accounted for 26 per cent of in-store payments last year, but is projected to decrease rapidly over the next four years.
Buy now, pay later is now the fastest-growing online payment method in Singapore, said the report.
THE BUSINESS TIMES