Three trends shaping the future of payments in Singapore
Consumer demand for convenience is a powerful driver in the payments industry, one that has accelerated the growth of digital commerce. Growing even more popular since the start of the pandemic, the digital economy in Singapore is expected to reach US$15 billion by 2025.
Visa sees three key trends leading to that horizon:
The world as your marketplace
Since the pandemic, Singaporeans have become more comfortable shopping online across a variety of channels, while Visa's Consumer Payment Attitudes study found that shopping at physical outlets decreased by 58 per cent. Singaporeans now expect shopping touchpoints that are embedded in their social lives, for example, live-streaming on social networks where shoppers can interact with influencers and buy in real time.
In particular, live-stream shopping has proven itself to be the next big e-commerce trend and one that is almost certainly here to stay. In the same report, Visa found that 65 per cent of Singaporeans have tried live-stream shopping. Nearly 1 in 5 (18 per cent) have actually made purchases. Among those who have not yet tried this, nearly 2 in 5 (36 per cent) are interested in the experience. Recent statistics further highlight the growing interest in this experience, as Shopee's 11.11 sale last November alone recorded over 300,000 hours of live-streaming; shopping via other platforms such as Facebook Live and Instagram Live remain popular.
As digital touchpoints continue to blend across all aspects of life, we can imagine that many purchases will be made independently from a store. In fact, our entire world has the potential to become a digital marketplace. To realise that potential, it is critical for the payment experience of consumers and merchants to be as seamless as possible; a hassle-free checkout process, for example, should be achievable with a simple tap or click
Digital goods: Garments and NFTs
It isn't just the channels we buy from that will keep shifting to digital; the very goods we buy may exist only in the digital world. As shoppers spend more time online, new digital buying experiences and digital-only goods are emerging.
Products increasingly come with unique digital-only attributes, encouraging new forms of digital immersion and interaction. We are seeing this come to life through augmented reality try-ons for cosmetics and downloadable virtual clothing and shoes. Local digital fashion startup Republique is a frontrunner in this space, fitting digital garments onto consumers' photos for posting on their socials.
Other digital goods that have been making waves include NFTs, or non-fungible tokens. Singapore has had its fair share of NFT exposure, with Singapore Art Week 2022 including an NFT exhibition at Funan Mall. Enthusiasts have begun to form their own communities and even dabble in the creation of NFTs. One such team made S$1.4 million from their debut project selling NFT trading cards alone.
In response to growing consumer interest, local companies, including popular women's fashion retailer Love, Bonito, have launched their own NFTs. Entertainment company mm2 Asia has launched its own NFT marketplace, Metaviva. Visa expects more businesses will experiment with digital-only products to break into new segments and meet consumers on the channels where they are already spending their time.
Enter the metaverse
But where will consumers wear their downloadable shoes? Digital-only goods will be a core part of the metaverse - an immersive, embedded virtual environment powered entirely digitally. In the metaverse, you can own NFTs for digital assets like art, collectibles and gaming items, easily selling them to other users on a blockchain.
Transitioning from being an online game developer, local startup BuzzAR is now working on a metaverse platform, Cryptotoon, in which users can create their own avatars and trade NFTs and other digital goods. To make NFTs more accessible to consumers, we are seeing the integration of card payments to facilitate purchases. Doing so has raised the popularity of NFTs, so the metaverse could very well be the next place businesses look to open a new store.
As more established trends like live-stream shopping meet novel trends like NFTs and the metaverse, it is necessary for both consumers and merchants to adapt to new ways to pay and to be paid. As the world of digital commerce evolves, only time will tell which new digital payment methods will find their place in Singapore.
The writer is country manager for Singapore and Brunei at Visa
This article is published on Business Times on 13 April 2022
About Visa Inc.
Visa (NYSE: V) is a world leader in digital payments, facilitating more than 215 billion payments transactions between consumers, merchants, financial institutions and government entities across more than 200 countries and territories each year. Our mission is to connect the world through the most innovative, convenient, reliable and secure payments network, enabling individuals, businesses and economies to thrive. We believe that economies that include everyone everywhere, uplift everyone everywhere and see access as foundational to the future of money movement. Learn more at Visa.com.