Research from small business platform Xero has revealed that the younger generations of consumers in Singapore are increasingly driving the shift towards digital payments. As part of its ‘I want to pay that way’ research, Xero analysed the change in payment habits of consumers in Singapore and how small and medium-sized enterprises (SMEs) adapt to it.

The company’s survey showcased a substantial shift towards digital payments in the region, with the trend being supported by government assistance and initiatives intended to advance the development of a digitally connected society. Regarding the research’s findings, representatives from Xero highlighted that understanding how different consumers prefer to pay and equipping them with the flexibility to choose how they transact can assist small businesses in getting paid faster and expanding their revenue. Being committed to delivering on its business strategy, the company is currently working on developing payment solutions that simplify and optimise how small businesses make and collect payments while helping them maintain a healthy cash flow.

Xero’s findings As detailed in its research, 76% of Singapore consumers leverage credit or debit cards for payments while 55% of them use funds transfer service PayNow or bank transfers. At the same time, nearly 22% of the population utilises the e-wallet service GrabPay and 21% rely on Buy Now, Pay Later (BNPL) platforms. Also, the survey reflects a shift in perspectives, with it underlining that 30% of consumers based in the region only carry their mobile phones to conduct payments when shopping, which is substantially higher percentage compared to the worldwide average of 21%.

This trend is highly supported by the younger generations which are embracing new digital payment methods, with PayNow being the preferred one for 68% of Gen Z users and 29% also leveraging GrabPay. Furthermore, Xero revealed that, by not meeting consumer payment preferences, businesses’ customer retention rates and revenue can be substantially impacted. The research found that 18% of Singapore-based consumers would go to another business with provides more payment options if a company does not deliver at least one of their preferred payment methods. On the other hand, even if trends indicate a move towards a cashless society, physical currency remains the favoured option for 79% of consumers, with them utilising it for transactions in everyday life.

Yet, 51% of local small businesses no longer accept cash payments, which makes Singapore the least likely country from the surveyed ones to receive physical currency. .