One of the most important aspects to pay attention to as an e-commerce start-up, whether in Singapore or elsewhere, is your payment methods. The platform through which your customers make purchases online significantly impacts their shopping experience. While the type of platform and its stability matters, the options available to your customers can be that winning strategy between you and your competitors.
Why are there different payment methods?
Many e-commerce sites set up different payment methods because they want to provide their customers with the flexibility to choose how they’d like to buy a product online. The ease of checking out via their preferred payment method among the options available makes them more willing to proceed with the transactions. What do businesses enjoy? Reduced abandoned cart rates and higher sales!
Having a good mix of payment options is critical here – after all, you want to provide just the right ones you know your customers will prefer.
Below, we list out what’s popular among online shoppers to help you decide which are the most suitable ones for your e-commerce business.
The best payment options for online shoppers
Here are some of the most popular e-commerce payment methods in Singapore:
1. Debit/credit cards
Debit and credit cards remain the most popular e-commerce payment method in Singapore. Both Visa and Mastercard are widely accepted for online purchases, giving shoppers a wide variety of options when it comes to making payments.
In addition, specific banks also offer enticing cashback and rebates that make spending with debit and credit cards very attractive. For instance, shopping online with some debit cards lets customers enjoy cashback on online food delivery and local transportation, while other credit cards let customers walk away with up to 1.7% cashback across their daily spend and on purchases related to insurance premiums, healthcare, and more.
2. Mobile wallets
Mobile wallets or e-wallets allow customers to store their credit card information safely and make payments quickly through a highly secured payment gateway. This is a particularly popular payment method among the younger generations, who prefer the convenience of making purchases without having to manually enter their credit card details.
Such digital wallets primarily fall into two main categories: bank and non-bank. When deciding on which ones to include, you should consider the varying payment preferences of international customers that you are shipping your products to. This way, you can cater the applicable methods to your overseas customers conveniently. The following are some of the most popular options for e-wallets when setting up an e-commerce business here in Singapore:
Non-bank digital wallets
Google Pay - Google Pay allows users to make payments online and in-app with their smartphones by connecting to the debit/credit card(s) they have on file in their Google Accounts.
Apple Pay - Apple Pay works similarly to Google Pay but is specific to users of Apple products. Payments made online are done via the Apple Wallet on an iPhone or Apple Watch.
Alipay - Alipay is the world’s most popular digital wallet, boasting over 1.3 billion users. It’s a must for any online retailer looking to sell to China, as consumers from the Chinese mainland can use Alipay in 56 overseas markets.
Bank-linked digital wallets
DBS PayLah! - DBS PayLah! is a mobile wallet offered by DBS Bank in Singapore. It allows customers to make payments through the app, a hassle free method that does not require the keying in of credit card details.
OCBC Pay Anyone - OCBC Pay Anyone is another offering by a local bank, OCBC. Through the app, OCBC customers can send money to anyone and make NETS QR purchases. They can also make payments for their meals, shopping, and more via this digital wallet.
UOB TMRW - UOB TMRW is an e-wallet offered by UOB Bank. With this digital wallet, users can make payments online and in-stores. There is also the foreign currency feature on the app, which allows customers to convert up to 11 currencies.
3. Buy Now, Pay Later (BNPL)
Buy now, pay later for online purchases are becoming increasingly popular in Singapore, with many companies offering such payment options for shoppers who want to spread the cost of their purchases. Taking global inflation and the rising costs of living into account, this payment option offers consumers the chance to purchase items more affordably, as they can cart out without having to pay the full amount upfront. They can, instead, opt to pay the amount in instalments over time through flexible payment plans.
This method is also beneficial to e-commerce businesses, as customers are more likely to purchase a product when given the choice of deferring their payments over a period of time. The following are some of the most popular BNPL services in Singapore which are popular internationally:
Atome - Atome is a Singapore-based company that has fast become one of Asia's leading BNPL platforms. Through its app, users can purchase items and pay in three instalments spread 30 days apart, with no interest incurred.
FavePay Later - FavePay Later is a BNPL service from Fave. Through this payment option, users of this platform can pay for their purchases in three equal instalments over three months with no interest.
ShopBack Pay Later - Formerly known as Hoolah, ShopBack Pay Later is a BNPL payment option that allows customers to pay for their purchases in three equal instalments, with no interest incurred.
4. Cash On Delivery (COD)
For online shoppers who prefer to pay in cash, COD is a popular payment option. This method allows customers to make cash payments when their order arrives at the delivery address. COD is particularly useful for businesses that cater to a customer base which typically prefers traditional payment methods.
5. Other popular alternative payment methods
PayPal and Stripe are two of the other popular e-commerce payment methods available in Singapore. Both provide secure, reliable portals for customers to make payments with their debit or credit cards. PayPal is one of the most widely used e-commerce payment services, while Stripe is a newer entrant that provides an alternative solution for businesses looking to accept payments without having to host their own payment gateway.
