GlobalData, a leading data and analytics company, has forecasted that card payments in Singapore are set to rebound with 8 percent growth in 2022, with improving economic conditions.
Singapore was among the first countries to be impacted by the COVID-19 pandemic. This caused significant economic disruption, with GDP contracting by 5.4 percent in 2020 – its first annual contraction since 2001. However, the economy has been gradually recovering with GDP increasing by 6.9 percent in 2021, supported by the Singaporean government’s stimulus program and nationwide vaccination rollout.
GlobalData’s Payment Cards Analytics claim the value of card payments in Singapore dropped by 10.5 percent in 2020. However, with gradual recovery in the economy, card payments are expected to rebound strongly in 2021 with an estimated 9.9 percent growth to reach S$100.6bn ($76.1bn). The value is anticipated to grow further at a compound annual growth rate (CAGR) of 6.1 percent between 2021-2025 to reach S$127.6bn ($96.6bn) in 2025.
In recent years, Singapore has significantly progressed towards becoming a non-cash society, supported by a high banked population and consumer awareness of electronic payments.
Growth in card payments is supported by its large card acceptance network, with almost six point of sale (POS) terminals for every 100 individuals in 2021. This is much higher compared to Australia (3.7), New Zealand (3.6), China (2.8), Hong Kong (2.5), Japan (1.9), and Taiwan (0.5).
“Singapore has a developed payment card market with a high degree of usage and penetration. While the COVID-19 pandemic and the uncertainty associated with it impacted card payments, the resumption of business activities and revival in consumer spending helped card payments recovery,” commented Nikhil Reddy, Senior Analyst at GlobalData.
While the pandemic has affected how consumers spend their money, it highlighted the necessity of non-cash payments among Singapore consumers as electronic payments are more effective in avoiding physical contact and social distancing.
Contactless card payments are predicted to be a key growth driver as consumers choose contactless cards over cash. To further encourage the usage of contactless payments, in December 2021, the Ministry of Transport in Singapore declared to discontinue traditional paper tickets at MRT stations by end of March 2022 and allow payments only via digital modes. This will further benefit the advancement of card payments.