SINGAPORE: Singapore is poised for a significant shift in its payment landscape, with cash transactions projected to decline by more than half by 2027, according to a recent report by Worldpay, a global payments technology and solutions provider.
The report predicts that cash usage in Singapore will drop from 15% (SGD 23 billion) of all point-of-sale (POS) transactions in 2023 to just 7% (SGD 11.4 billion) by 2027. This places Singapore alongside countries like France, South Korea, the UK, and the US, where the transaction value of cash is also expected to fall below 10% within the same period.
The decline in cash usage reflects a broader trend among Singaporeans, who are increasingly favoring cards and digital wallets for their POS payments. Digital wallets, in particular, are set to see a substantial rise, projected to account for 44% (SGD 75 billion) of transaction value by 2027, up from 22% (SGD 33.6 billion) in 2023.
Interestingly, credit cards, which were the leading payment method in terms of transaction value at POS terminals in 2023, are expected to see a relative decline. By 2027, credit cards are anticipated to account for 29% (SGD 49 billion) of all transaction values, falling behind digital wallets.
Debit cards, meanwhile, comprised 20% of all Singaporean spending at POS terminals in 2023. Despite the growth in card spending, digital wallets backed by cards are projected to become the predominant payment method for Singaporeans at POS terminals.
Worldpay’s report highlights Singapore as a leader in the adoption of cashless payments in Southeast Asia. In 2023, the city-state recorded the lowest cash POS transaction value in the region at just 15%, translating to fewer than one in five transactions involving cash.
In stark contrast, other Southeast Asian nations continue to see a much higher reliance on cash. For instance, cash transactions account for 38% of POS transactions in Indonesia, 32% in Malaysia, 44% in the Philippines, 46% in Thailand, and 38% in Vietnam.
This marked decline in cash usage in Singapore underscores the nation’s rapid shift towards a cashless society, driven by the increasing popularity and convenience of digital payment methods. As the trend continues, Singapore’s position as a regional leader in cashless payments is expected to strengthen further.
TISG/