As the one-year mark of the COVID-19 pandemic approaches and digital payments play a larger role in daily life around the world, there will be no reverse gear on consumer behaviour as we head into 2021. In the third edition of its global research study, the “Visa Back to Business Study – 2021 Outlook,” found that the continued small and micro business (“SMB”) shift towards digital commerce will evolve in the New Year.
The study showed that by the end of 2020, more than nine in 10 Singapore SMBs surveyed (91%) had embraced new forms of digital technology to meet changing consumer behaviours, compared to the global average of 82 per cent. Looking ahead to 2021, SMBs are assessing what other payment technologies are critical in meeting today’s consumer expectations, particularly in security and fraud management software, contactless and mobile payments acceptance, digital payments acceptance via mobile devices, instalments or ‘buy now, pay later’ solutions, and digital backend payment operations.
In response to the rising adoption of cashless payments among consumers, many Singapore SMBs have begun accepting contactless payments, in addition to accepting new forms of digital payments. More than four in five Singapore SMBs (82%) expect consumers will prefer contactless payments, even after a vaccine is widely available. In fact, only six per cent of consumers in Singapore, the lowest of all markets surveyed, say that they would revert to their old methods of payments after a vaccine is widely available.
At the same time, Singapore SMBs are also embracing technology solutions for customer engagement. This is driving investment in new tools, particularly investment in security and fraud protection solutions (58%), where Singapore is the leading market. As the shift towards eCommerce continues to accelerate, recognising and responding to a potential fraud attack will continue to be an advantage in 2021.
”COVID-19 has seen consumers rapidly increase the use of digital commerce experiences — from seeking new, safe ways to pay that do not involve touching a terminal, to shopping online more often for a variety of purchases. As the world’s leader in digital payments, we have seen a remarkable transition towards digital shopping and purchasing habits, and have quickly pivoted to help our clients and partners keep up with consumer demands that we know will remain valuable, even after the pandemic. In Singapore, we noticed that consumers are now using device-initiated payments more than before, to reduce physical contact. Last year, one in five Visa cardholders in Singapore use mobile tokens to make payments on average per month. The number of device-initiated transactions has grown more than 50 per cent compared to 2019,” said Kunal Chatterjee, Visa Country Manager for Singapore & Brunei.
“Despite SMBs doing their best to keep pace with changing preferences and the emergence of new technologies in payments and commerce, many are still dependent on community support. We will continue to help SMBs bounce back from COVID-19 with initiatives such as Where You Shop Matters, that help encourage consumers to support local businesses, while supporting the digitalisation of local SMBs,” he said.
Increased efforts by Singapore SMBs to digitalise is driven by a new era for consumer habits in payments and commerce, ushered in by the new year. As contactless payments provide consumers with a secure, convenient and safe way to pay, its global rise in 2020 shows no signs of slowing down in 2021. Nearly seven in 10 consumers in Singapore (69%) have used contactless payments whenever possible in the past three months, making it their top adjustment.
The stickiness of new habits formed during the pandemic should not be underestimated. Nearly four in five consumers in Singapore (76%) would prefer to use contactless payments as much as, or even more than, they are currently using it, compared to the global average of 65 per cent. Singapore consumers have also adjusted by shopping online whenever possible (61%) and not using cash as much (52%).
As the trusted engine of commerce, Visa will continue to introduce new programs and resources that advance its commitment to support 10 million SMBs in Asia Pacific. As part of Visa’s Where You Shop Matters initiative to help SMBs digitalise, SMBs in Singapore can tap on the Visa eCommerce Starter Kit and leverage a variety of offers, solutions and free tools to start, manage and grow their businesses online.