Singapore: BNPL to be the fastest growing online payment method by 2025, while credit card use to fall

BNPL to become the fastest growing online payment method, particularly in e-commerce

Singapore. The latest Global Payments Report 2022 by Worldpay from FIS projected that Buy Now Pay Later (BNPL) is expected to be the fastest-growing online payment option by 2025. On the other hand, credit card usage in e-commerce purchases is projected to fall not only in Singapore but in Asia by 2025.

Together with digital wallets, it will make-up half of online payment options in Singapore. BNPL payment method is expected to grow at a compound annual growth rate (CAGR) of 40% from 2021 to 2022. Moreover, this online payment method is forecasted to double its share of the e-commerce transaction value from 4% in 2022 to 8% by 2025.

BNPL as popular alternative to credit cards

Buy Now Pay Later Singapore

BNPL payment option is seen as the popular alternative to credit cards nowadays. The increasing popularity of BNPL service is mainly because the merchants are attracted by its promises of higher conversion rates and basket sizes.

An insight report from Milieu – “The Big Picture – Payments” found that about 19% of Singaporeans aged 16 and above have tried the leading BNPL in Singapore, such as Hoolah, Atome or Grab PayLater.

Since the start of the pandemic, homegrown BNPL services such as Atome, hoolah and Grab PayLater continue to grow.

During the pandemic, Hoolah experienced more than 1,500% growth in a transaction, over 800% increase in sales value and over 400% increase in merchant and consumer.

In addition, Hoolah’s competitor Atom achieved remarkable growth. In September 2021, its CEO David Chen shared on Paypers that it has gained over 20 million registered customers. Moreover, it has disbursed S$1.35 billion with over 15 million transactions.

The leading ride-hailing firm Grab also sees rapid growth in BNPL arrangements. It is currently offering BNPL payments in Singaporean and Malaysian markets and has shared its first earnings on March 3, 2022, and reported that the total payment volume for BNPL grew five times between Q4 2020 and Q4 2021. As such growth, Grab plans to launch its service in other markets

BNPL’s rapid growth is not only seen in Singapore or Asia but also globally. The report projected that it will make up 5.3% of global e-commerce transaction value, from just 2.9% in 2021.

Credit Card use to fall in e-commerce transactions

Credit Card use to fall in e-commerce transactions

Global Payment Report by Wordplay showed that credit/charge cards as a primary online payment method last year which us about 42% of the e-commerce transaction value. However, it is projected to fall to 38% by 2025.

On the other hand, credit cards are expected to continue as the leading payment method for point-of-sale (POS) transactions in-store, growing by 37% by 2025 from 34% in 2021.

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