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Payment Solutions by Industry Sector: Singapore

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Singapore is well-known as one of the fastest growing economies in the world, so it’s no surprise that it is also one of the frontrunners of credit and debit payments in Asia. Particularly in recent years, consumerism in the city-state has changed enormously. In a survey conducted 13 years ago, the Department of Statistics and IDA revealed that only 25 percent of Singaporean consumers who made online transactions used a credit card for their payments, while cheques were the dominant method and cash payments came in second. Conversely, a report by Datamonitor in July 2012 demonstrated that two out of three consumers in Singapore were now interested in using their mobile phones as a method of payment, not only online but in physical shops as well, and today all three of the country’s mobile providers are equipped to enable near-field communication payments to be made. With such swift evolution and ever changing demands, merchants from all industry sectors are having to keep up to avoid being outpaced by their competitors. But which are the best payment solutions?

Main business sectors and the evolution of payment

Service-producing industries predominate over goods-producing industries in Singapore. While the latter accounted for just over 32 per cent of Singapore’s GDP in 2011, the former accounted for nearly 62 per cent. Within these figures, and which still remain true today, the republic’s main economic activities were in financial services, wholesale and retail trade, the tourist sector and business services.

Each of these business sectors are well-versed in accepting credit and debit card payments; most of them, especially those related with tourism and retail trade, still use traditional fixed point-of-sale terminals, which allow the clients to spend their money directly in the place where the service is provided. While this has previously been hugely successful, new ways of payment are constantly being introduced into the retail field, such as payments via mobile and contactless payments which allow for faster turnaround in locations with high footfalls. Similarly, the nature of customer service has also evolved to necessitate the adoption of mobile POS terminals, allowing shop assistants to be ever more attentive and bring the till point to the customer.

Mobile point of sale terminals (compact card reading machines which can be used while on the move) are also an ideal payment solution for the trade industry. Vendors and merchants can take their businesses on the road and continue to process payments wirelessly (without the need of a fixed data line to process the transactions).

The surge of online commerce

Online commerce has been growing exponentially in the Asia Pacific region for quite some time. According to aforementioned report by Datamonitor, it was found that online payments in Singapore alone reached approximately $860m during 2011, demonstrating it as a powerful and dynamic business sector.

Not only does online commerce make sense in numerous ways from a merchant perspective, it also offers benefits to the customer by allowing him to select from multiple products and a range of payment forms. For example, the use of prepaid cards, a sector dominated by non-banks card issuers, has become quite common. The simplicity of the transactions and the fact that customers do not have to wait for their payment to be processed, are some of the reasons why they prefer online payments to physical ones.

While traditional point-of-sale terminals arguably allow the client to feel more secure using credit or debit card, online retailers and business services are still seen as a riskier alternative. This view has declined, and continues to decline, over time, but online merchants should continue to account for this by fostering trust in their payment options. One way of doing so is to promote their compliance with PCI (payment card industry) standards. Merchants from all business sectors should adhere to these official standards, or partner with a payment services provider who will relieve this obligation from the business.

The future of payment acceptance

While the growth of online commerce has been a major factor in the transformation of payment solutions for all industries in Singapore, it remains that many economic sectors simply don’t have the opportunity or model to use the internet and its cardless payment methods to attract clients. This in itself is a reason that traditional point of sale terminals won’t become entirely obsolete. However, these businesses should consider updating their systems to accommodate the demand for alternative payment methods like mobile. Applications such as online wallets, which are now in frequent use and provide a versatile solution for merchants and consumers, allowing the user to manage their shopping and card information via a centralised application which is linked to their mobile phone. Provided the business is able to accept this form of payment, it encourages a sense of ‘online’ availability which consumers appear to be leaning towards in the market today.

While there are some payment processing options that are more obviously suited to certain industry sectors, there is in fact a great deal of overlap and room for the adoption of new technologies in each sector.

[1] According to a speech by Yong Ying-I, Chief Executive Officer, IDA Singapore. (
[2] Singapore Major Business Sectors (Switzerland Global Enterprise). (
[3] According to the report “Payment Cards in Singapore” published in 2012 by Datamonitor. (
[4] Ibíd.

After working as a manager in a menswear tailors, Mark is now in the process of setting up his own business. Many of his loyal customers are based in South East Asia, and it is important for him to make his small business adaptable. He is a golf addict when he is not working.

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