Could Singapore be the next big opportunity for digital payment providers?
According to a recent survey by online payments giant PayPal, as much as 90% of Singaporeans prefer to use cash as their primary mode of payment, with just a fraction of respondents saying they use digital payments regularly. This is despite the governmental push towards digital solutions as part of it “Smart Nation” vision for Singapore’s future!
PayPal’s share price has risen by 55% so far this year
Source: Yahoo Finance
Despite a preference for cash, most Singaporeans found using it too much hassle, with only 43% doing so regularly. Instead, they tended to use ‘traditional’ payment methods like bank transfer or internet banking (74% preferred to digital payments) and credit cards (which a further 61% preferred).
Singapore here stands in stark contrast to China, where only 25% use cash regularly, and digital payment methods have quickly become the new normal. In China, 48% of shoppers regularly use these methods, including digital and online wallets. In Singapore, just 3% do so.
Rahul Shinghal, PayPal’s general manager of South-East Asia, made the following comment on the report: “We are already taking great strides in making digital payments part of our daily lives, but as rightly pointed out by Prime Minister Lee Hsien Loong in his National Day Rally speech, we still have some ways to go. Our adoption of digital payments.”
The report suggested that, perversely, high awareness of different payment types may actually be a barrier to their adoption, saying “the plethora of digital payment options in Singapore and the lack of interoperability between the varying systems may cause many to default to a payment mode that they are comfortable using, which is cash.”
As a result, PayPal has called for a push towards “integrated payment infrastructure from the government and industry players.”
The same forces that are pushing the digital payment revolution globally are, of course, at work in Singapore: digital payments make fraud and tax avoidance more difficult, they’re more convenient for merchants and shoppers alike, and they tend to diminish cash mismanagement. Can PayPal convince Singapore to join that revolution?
Dominion holds PayPal in its Global Trends Ecommerce Fund.
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