56% of Singapore Consumers Aware of Cross-Border Digital Wallet Capabilities

While digital wallets offer a compelling vision for the future of cross-border payments in Singapore, a new report reveals a notable disparity between robust merchant familiarity and lagging consumer awareness, a key factor potentially hindering broader adoption.

The “Global Money Movement: Singapore Edition” report, a recent collaboration between PYMNTS Intelligence and TerraPay, provides an in-depth analysis of the evolving digital wallet landscape for cross-border payments within the city-state.

Conducted from September to October 2024, the comprehensive study drew insights from 2,757 consumers in Singapore, including 777 who conducted cross-border payments in the preceding 12 months.

The research also incorporated responses from 89 business owners and leaders at Singaporean small- to medium-sized businesses (SMBs) engaged in international transactions, with these firms generating annual revenues of up to $10 million in 2023.

The report indicated that while digital wallets are actively transforming Singapore’s cross-border payments environment, their adoption remains uneven among consumers and merchants. Businesses demonstrate strong familiarity with these primarily app-based methods, which enable faster financial transactions.

Yet, despite consumers being more frequent users of these wallets than businesses, many individuals show a notable lack of awareness, which is slowing wider adoption. With traditional payment methods such as debit cards still dominating consumer transactions for goods and services, the report emphasized that bridging this knowledge gap is essential to accelerate digital wallet usage by individuals and fully leverage the payment method’s potential for businesses.

Key findings from the report include:

Familiarity Disparity: A significant gap exists in the understanding of digital wallets for cross-border payments. Eighty-four percent of merchants report being very familiar with the technology, notably higher than the 56% of consumers who share the same level of familiarity. This awareness deficit is critical, as consumers familiar with digital wallets are 30% more likely to use them.

Speed as a Driving Force: For non-users, the ability to complete transactions faster is the most compelling reason to adopt digital wallets. Nearly half (45%) of consumers and a substantial 64% of merchants indicate that faster transactions would motivate them to start using digital wallets within the next 12 months.

Security Concerns: Security worries emerge as the leading barrier preventing broader adoption of digital wallets for cross-border payments. Over one-third (36%) of consumers who do not use digital wallets cite security as a reason, with 27% identifying it as their single most important deterrent. Merchants also express similar reservations, with 42% highlighting security concerns, though it ranks as the most significant barrier for a smaller proportion (17%) of businesses.

Beyond these pivotal findings, the report explores additional factors shaping digital wallet adoption in Singapore.

Demographically, younger generations — Generation Z and millennials — are leading the charge in usage, and adoption rates are higher among individuals with higher incomes and within larger businesses, suggesting a need for targeted initiatives to encourage broader engagement across all demographics.

The study also noted that while consumers typically use digital wallets for remittances, businesses primarily use them for supplier payments and bills, encountering distinct challenges like usability issues (32% of merchants) and difficulty accessing funds (34% of merchants).

To fully harness the momentum of digital payments, the report suggested that financial institutions and payment providers should collaborate to enhance awareness and reinforce security measures.

Ultimately, addressing these awareness gaps, improving security perceptions and enhancing usability are crucial steps to transform digital wallets from an emerging payment option into a mainstream financial tool, benefiting both businesses and consumers in Singapore’s increasingly digital economy.

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