While credit cards are the most popular payment method at the moment in Singapore - taking 60 percent share of the payments market - the usage is set to collapse by 24 percent in 2020, according to Worldpay's 'Global Payments Report 2016.'
The report analysed 30 e-commerce markets around the world, including Singapore, China, India, Hong Kong, Taiwan, South Korea, Malaysia and Australia in Asia, Worldpay said in a press statement on 5 December 2016.
"Our projections show that by 2020, credit cards will account for just 36 percent of the payment market in Singapore," said Phil Pomford, General Manager Asia Pacific, Global eCom at Worldpay. "This growing credit-wariness could be symptomatic of a wider political push to help consumers avoid debt."
The Singapore government's Total Debt Servicing Ratio (TDSR) rules were implemented in 2013. They were designed to ensure that monthly debt payments don't exceed 60 percent of the debtor's monthly income.
"This public focus on the issue of debts helps explain why credit card use is predicted to fall nearly a quarter in less than five years, while debit card use is expected to rise," Phil Pomford added.
At the moment, debit cards, cash on delivery and bank transfers each account for nine percent of the total payments market in Singapore. But according to Worldpay's research, all of these non-credit payment options will double or nearly double by 2020.
"Online merchants that want to win the hearts and wallets of shoppers in Singapore must offer a range of traditional and alternative payment methods, because credit cards alone just aren't enough. [E-commerce companies] can also partner with a knowledgeable payment provider to ensure that they continue to offer the right payment experience and keep gaining customers in Singapore's thriving ecommerce market, which is set to grow by 11 percent to US$5.8 billion by 2020," Pomford advised.
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