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E-commerce Payments Trends

2020 E-commerce Payments Trends Report: Singapore 


Newcomers to Singapore’s e-commerce market will find a nation of high-spending smartphone fans, ready to spend with international merchants 

Key Takeaways

 

Singapore takeaway

Singapore is a wealthy nation of digitally confident consumers, with government policies that actively support high levels of international and domestic e-commerce. 

Singapore takeaway

The stage is therefore set for international merchants to make their mark. Both physical and digital infrastructure in Singapore are best-in-class, and consumers welcome the opportunity to spend with overseas businesses

Singapore takeaway

However, this level of sophistication means merchants must thoroughly research local preferences and trends to ensure they are competitive. Singapore is an early adopter of mobile and social commerce trends. 

 

Singapore takeaway

 

Singapore is a compact nation, which nevertheless punches above its weight when it comes to e-commerce availability and user experience.

With the third-highest GDP per capita in the world,1 Singapore’s 5.7 million citizens spend in high amounts online. The average annual online spend is SGD2,206.24 (US$1,618),2 which represents one of the highest annual spends out of the countries surveyed in our report.

Some of the fastest-growing product categories include food and personal care, electronics and media, and online food delivery.3

Singapore's market-leading postal service also supports e-commerce. Singapore has a standardized address and postal code system, which operates alongside excellent road, rail and air infrastructure. This allows merchants to deliver packages cost-effectively, with most domestic parcels arriving overnight.4 This will drive consumer expectations of delivery speeds.

 

  • Singapore’s business-to-consumer e-commerce market has been growing at a steady double-digit rate since 2017. The global economic downturn caused by COVID-19 explains the lower expected compound annual growth rate (CAGR) of 7.7 percent to 2023.5
  • The top three e-commerce sites by monthly traffic are marketplaces Lazada, Qoo10 and Shopee.6 Amazon and eBay are significant Western players, with Amazon investing in the Singaporean sellers on its platform via an education portal launched in the second half of 2020.7
  • E-commerce as a percentage of overall retail spend is low compared with advanced e-commerce markets such as the UK and U.S., standing at 5.6 percent.8 The country’s high population density and excellent transport infrastructure supports ongoing physical retail.9

 

Uniform Internet Availability Underpins Mobile Commerce Expansion

  • Mobile commerce is growing stronger than the overall e-commerce market, and is projected to expand at a compound annual growth rate of 13.6 percent to 2023, to become a SGD6.52 billion (US$4.8 billion) market.10

  • Growth is being driven by Singaporean consumers aged 18 to 29, with 75 percent of this demographic using their mobile devices to shop.11
  • Smartphone penetration is high in Singapore, at 78 percent.12 This is supported by excellent mobile and fixed internet infrastructure. At 91 percent coverage across the city-state, Singapore has one of the world’s highest internet penetration rates.13

 

Singaporeans Readily Adopt New E-commerce Technology

  • Almost half (47 percent) of all e-commerce transactions are completed on a mobile device. Apps are the preferred way to access an online store. Social media is also important to Singaporeans: the country has one of the highest rates of social media use in the world, and 96 percent of marketers in south-east Asia believe social commerce will become increasingly important in the next four years.14
  • Singapore as a nation is embracing biometric authentication. Over half (51 percent) of Singaporeans state that they are interested in biometrics to authenticate their payments. Singapore's Ministry of Home Affairs is planning a science and technology agency to focus on biometrics, to meet demand for the technology.15

  • Live streaming is a fast-growing sales channel, reflecting a trend seen throughout south-east Asia. Brands stream content and work with social media influencers to promote products, with viewers able to purchase in real time in-app. Market leader Lazada’s LazLive had 4,500 Singapore merchants sign up to use the service in April 2020 alone, with total gross merchandise volume generated through LazLive increasing by 450 percent month-on-month.16

 

Cards and Digital Wallets Drive Singapore Purchasing 

  • Cards dominate, and are used for 65 percent of e-commerce transactions in Singapore.17 Credit and debit cards are held in roughly equal measure by citizens, with 1.73 debit cards and 1.61 credit cards per capita.18 Card use is set to fall to 57 percent of transactions to 2023.19
  • Digital wallets are growing in use. Currently used for 18 percent of transactions, high smartphone use is driving uptake. Digital wallets will take a 26 percent share of the market by 2023.20 PayPalTM, with an estimated market share of 5 percent to 10 percent, is the most-recognized digital wallet brand. Apple Pay, Samsung Pay, Visa® Checkout and Masterpass are also utilized.21

  • The Singapore Payments Council launched a payment system in September 2018, which established a common standard for QR code payments. It works across all schemes, digital wallets and banks in the market. Consumers use a QR-code-based service to pay with any merchant.22

 

China Leads as Top Overseas Shopping Destination

  • As a compact city-state, cross-border shopping is a defining feature of Singapore’s e-commerce market. The cross-border e-commerce market in Singapore is worth SGD2.91 billion,23 representing an exciting opportunity for international merchants.

  • 73 percent of online consumers in Singapore have shopped from overseas merchants, and cross-border e-commerce takes 35 percent of the overall Singaporean e-commerce market.24, 25
  • Large, established e-commerce markets are preferred. China leads as the most popular overseas online shopping destination, followed by the U.S. and South Korea.26

 

E-commerce Standards Emerge in a World-Leading Place to do Business

 

  • Regulation/trends
    Singapore has specific e-commerce regulations. Initiatives and grants have been created by government agencies to encourage e-commerce investment in the country. In June 2020, Enterprise Singapore and the Singapore Standards Council set out a national standard for e-commerce transactions, called Technical Reference 76.
    27
  • Barriers or benefits to e-commerce market entry
    Singapore offers an excellent business climate. The World Bank ranks Singapore as the best country in Asia to do business, and the second best worldwide. Singapore ranks first in the 2017 Euromoney Country Risk Survey as the country with the most stable political climate and lowest sovereign risk globally.
    28

A local entity is required to sell online in Singapore. Merchants must also register with the Accounting and Corporate Regulatory Authority (ACRA).29

  • Factors driving the cost of payment acceptance
    The average card acceptance cost is 0.73 percent and 2.18 percent for debit and credit card domestic transactions, respectively. PayNow QR transactions are free of charge until 31 December 2021, and will have a fixed fee of SGD0.20 from 2022 onwards. PayPal
    TM typically has a higher acceptance cost than cards.30

 

J.P. Morgan has analyzed 34 e-commerce markets to decipher the trends and challenges driving global e-commerce in 2020. To access our insights on a country-by-country basis, click here.

 

1. worldbank.org, July 2020. ‘GDP per capita, PPP.’ Accessed July 2020.
2. J.P. Morgan 2020 E-commerce Payments Trends Report: Data has been provided to J.P. Morgan by Edgar, Dunn and Company, 2020.
3. J.P. Morgan 2020 E-commerce Payments Trends Report: Data has been provided to J.P. Morgan by Edgar, Dunn and Company via Nielsen, ‘Future Opportunities in FMCG E-Commerce: Market drivers and five-year forecast,’ 2018.
4. J.P. Morgan 2020 E-commerce Payments Trends Report: Data has been provided to J.P. Morgan by Edgar, Dunn & Company via Statista, 2020, and Nielsen, ‘Future Opportunities in FMCG E-Commerce: Market drivers and five-year forecast,’ 2018.
5. J.P. Morgan 2020 E-commerce Payments Trends Report: Data has been provided to J.P. Morgan by Edgar, Dunn & Company and WPL, 2020.
6. statista.com, December 2019. ‘Top 10 e-commerce sites in Singapore as of third quarter of 2019, by monthly traffic.’ Accessed July 2020.
7. sbr.com.sg, June 2020. ‘Amazon rolls out learning portal for Singaporean SMBs.’ Accessed July 2020.
8. J.P. Morgan 2020 E-commerce Payments Trends Report: Data has been provided to J.P. Morgan by Edgar, Dunn & Company via Department of Statistics Singapore, Retail Sales Index and Food & Beverage Services index, July 2019.
9. thepaypers.com, January 2019. ‘Why are some markets more ecommerce friendly than others?’ Accessed July 2020.
10. J.P. Morgan 2020 E-commerce Payments Trends Report: Data has been provided to J.P. Morgan by Edgar, Dunn and Company, WPK and WPL, 2020.
11. J.P. Morgan 2020 E-commerce Payments Trends Report: Data has been provided to J.P. Morgan by Edgar, Dunn & Company via Hootsuite, Statista, & export.gov, 2020.
12. J.P. Morgan 2020 E-commerce Payments Trends Report: Data has been provided to J.P. Morgan by Edgar, Dunn & Company via Statista, 2020.
13. J.P. Morgan 2020 E-commerce Payments Trends Report: Data has been provided to J.P. Morgan by Edgar, Dunn & Company via Hootsuite , 2020.
14. asiaone.com, October 2019. ‘96% of companies in South East Asia agree that social commerce will become increasingly important in the next five years - new Econsultancy research.’ Accessed July 2020. 
15. J.P. Morgan 2020 E-commerce Payments Trends Report: Data has been provided to J.P. Morgan by Edgar, Dunn & Company via Singapore Payments Council, 2020, and Visa, ‘Intelligent payment experiences driven by a technology dominant lifestyle,’ 2019.
16. sbr.com.sg, July 2020. ‘Ecommerce giant Lazada reinvents online shopping through LazLive.’ Accessed July 2020. 
17. J.P. Morgan 2020 E-commerce Payments Trends Report: Data has been provided to J.P. Morgan by Edgar, Dunn and Company, 2020.
18. J.P. Morgan 2020 E-commerce Payments Trends Report: Data has been provided to J.P. Morgan by Edgar, Dunn & Company and Monetary Authority of Singapore & WorldBank, 2020.
19. J.P. Morgan 2020 E-commerce Payments Trends Report: Data has been provided to J.P. Morgan by Edgar, Dunn and Company, 2020.
20. J.P. Morgan 2020 E-commerce Payments Trends Report: Data has been provided to J.P. Morgan by Edgar, Dunn and Company, 2020.
21. J.P. Morgan 2020 E-commerce Payments Trends Report: Data has been provided to J.P. Morgan by Edgar, Dunn and Company, 2020.
22. J.P. Morgan 2020 E-commerce Payments Trends Report: Data has been provided to J.P. Morgan by Edgar, Dunn & Company via Singapore Payments Council, 2020.
23. J.P. Morgan 2020 E-commerce Payments Trends Report: Data has been provided to J.P. Morgan by Edgar, Dunn and Company, 2020.
24. J.P. Morgan 2020 E-commerce Payments Trends Report: Data has been provided to J.P. Morgan by Edgar, Dunn & Company via Statista, 2020.
25. J.P. Morgan 2020 E-commerce Payments Trends Report: Data has been provided to J.P. Morgan by Edgar, Dunn and Company, 2020.
26. J.P. Morgan 2020 E-commerce Payments Trends Report: Data has been provided to J.P. Morgan by Edgar, Dunn and Company via IPC, 2019.
27. technologylawdispatch.com, June 2020. ‘Singapore launches national e-commerce standard.’ Accessed July 2020. 
28. J.P. Morgan 2020 E-commerce Payments Trends Report: Data has been provided to J.P. Morgan by Edgar, Dunn & Company via Singapore Economic Development Board, 2020.
29. J.P. Morgan 2020 E-commerce Payments Trends Report: Data has been provided to J.P. Morgan by Edgar, Dunn & Company, 2020.
30. J.P. Morgan 2020 E-commerce Payments Trends Report: Data has been provided to J.P. Morgan by Edgar, Dunn & Company via UOB, & PayPalTM 2020.

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Existing Merchant Service Customers

If you have a technical issue or a question about your merchant account, please call your Relationship Manager directly.
Alternatively, call our merchant support team on:

For Europe: +353 1 726 2909     UK: 0845 399 1130

Further information is available at any time through your Paymentech Online account.

 

Out of Courts Complaints and Redress Procedures

  1. J.P.Morgan has in place complaint resolution procedures to settle complaints of Merchants arising from their rights and obligations under Parts 3 and 4 of the Payment Services Regulations 2018.
  2. If you have a complaint, please contact your Relationship Manager. Your complaint will be addressed in accordance with J.P.Morgan complaint policy, which we are happy to provide upon request.
  3. In the event of a complaint, a Merchant may refer the matter to the Irish Financial Services and Pensions Ombudsman (FSPO) or such relevant out-of-court complaint body or to such other competent out-of-court complaint body applicable to you in the country where you are established.
  4. Details on complainant eligibility are available on the FSPO website.

                   You can contact the FSPO at:

Irish Financial Services and Pensions Ombudsman
Lincoln House
Lincoln Place
Dublin 2
D02 VH29
Ireland
Tel: + 353 1 567 7000
Email: info@fspo.ie
Website: https://www.fspo.ie

 

Merchants domiciled in the UK

  1. From 1st January 2021, J.P.Morgan will enter into the UK's Temporary Permissions Regime (TPR).
  2. The TPR has been established by the UK regulators to allow firms such as J.P.Morgan to continue to operate in the UK following the end of the Brexit transition period.
  3. During the TPR, a UK-based merchant that is not satisfied with our response to a complaint and that qualifies as an eligible complainant may refer the matter to the UK's Financial Ombudsman Service. Details on complainant eligibility are available on the Financial Ombudsman Service website.

                   You can contact the Financial Ombudsman Service at:

Financial Ombudsman Service
Exchange Tower
London
E14 9SR
Free phone: 0800 023 4567
Email: complaint.info@financial-ombudsman.org.uk
Website: www.financial-ombudsman.org.uk