Business

Guide on Payment Options for E-Commerce in Singapore

E-commerce businesses are growing rapidly worldwide. A significant rise has also been observed in Singapore’s e-commerce industry. Entrepreneurs in this industry are slowly positioning themselves among the key players in the Singapore retail business space. Mandatory factors like payment options for e-commerce in Singapore are relevant to the growth of the e-commerce business industry in Singapore.

Payment System in Singapore

Singapore’s payment system has evolved over time, using factors like cultural, political, legal, economic, and arrangements within the market economy to determine the value of goods and services. Singapore’s most widely used payment systems comprise cheques, interbank, third-party accounts, mobile banking services, debit and credit transactions, etc.

Relevant Factors for Choosing Payment Options for E-Commerce

Certain relevant factors must be considered before choosing the best payment options for e-commerce in Singapore. The following three are crucially important factors required for opting for the best payment system:

1. Transaction Fees

Every transaction made through a payment gateway in Singapore charges a transaction fee in exchange for using the payment gateway application. The fixed percentage of all the transaction, flat, or set-up fees must be determined by the e-commerce businesses applying for a Payment Gateway License.

2. Accepted Payment Method

Online transactions are the accepted payment method for e-commerce businesses. The e-commerce businesses that accept this method must also determine the scope of other alternative payment methods used in Singapore.

3. Technical Integration and User Experience

Generally, consumers enjoy a hassle-free user experience while using hosted payment options for e-commerce in Singapore. So, e-commerce businesses must consider quickly integrating the payment website to secure the user experience.

4. Security and Compliance

The gateways with robust security and compliance standards must be considered before choosing payment options for e-commerce in Singapore.

5. Scalability of Payment Gateway

Lastly, the business scalability of the payment gateway must be considered by e-commerce businesses in Singapore.

Types of Payment Options for E-Commerce in Singapore

Payment options for e-commerce businesses in Singapore include setting up a payment gateway account or 3rd party merchant account to secure payment systems in Singapore.

There are diverse payment options offered to the e-commerce business setups in Singapore. Consider the following types of payment options as provided below:

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1. Setting Up Merchant Accounts

Banks extend the line of credit for e-commerce business setups by setting up an online merchant account. Generally, e-commerce businesses are free to use their banks to set up an online merchant account for processing credit card payments.

Also, the DBS & Standard Chartered Banks operate their merchant service for e-commerce businesses in Singapore. Some of the services provided by these reputed gateways are provided below:

  • Accepts online payments;
  • Mail order telephone orders (MOTO);
  • Batch processing services;
  • Provides merchant solutions like customization of payment pages;
  • Handles verification and transfer requests;

1.1. PayPal

PayPal is a global leader in online payment solutions. It offers merchants all-in-one solutions for integrating PayPal-generated code through website payment standards and website payment pro.

2. Setting Up Payment Gateway Account

Next is the setup of a payment gateway account, a crucial payment option for e-commerce in Singapore that bridges the gap between the customer’s payment method and the merchant account holders. Some of the best payment gateways for e-commerce businesses that secure the transferability of funds are provided below:

2.1. e-NETS

e-NETS is one of Singapore’s most widely used electronic payment options for e-commerce. Generally, the e-NETS integrated payment gateways facilitate credit/debit card payments, direct debit, and Internet banking services.

e-NETS payment gateways are owned by the largest banks in Singapore, including DBS Bank, United Overseas Bank, and OCBC Bank. The Monetary Authority of Singapore considers the e-NETS payment system the national payment system. 

2.2. BrainTree

BrainTree, an integrated payment gateway system, is one of the modern payment options for e-commerce in Singapore. Owned by PayPal, BrainTree ensures the handling of split payments shared with the application.

The setup of BrainTree is comparatively easier than PayPal Express Checkout by offering advanced customizable options for payment checkouts.

2.3. GrabPay

GrabPay, a payment gateway, offers benefits (including immediate full payment receipts, complete encryption, and the ability to check transaction details) to merchants and business owners.

2.4. PayPal Express Checkout

PayPal Express Checkout is a hosted payment gateway that benefits merchants with existing PayPal business accounts. No setup or monthly fees are charged for discounted rates when the e-commerce businesses reach the minimum qualifying monthly sales volume.

2.5. DBS PayLah!

DBS PayLah! is the highly populated payment gateway owned by DBS Bank. It facilitates convenient and seamless payment options for e-commerce in Singapore by directly debiting money from consumers’ DBS accounts.

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However, it is not ideal for new startup merchants due to the higher one-time setup, annual usage, and card transaction fees.

2.6. GTPay

GTPay, which stands for Global Trading Pay, is a Singapore-based payment solution for e-commerce businesses. The GTPay payment processor enables the acceptance of major credit cards like MasterCard, Visa, AMEX, and JCB.

2.7. Stripe

Stripe is an integrated payment gateway that was launched in Singapore in 2016. It offers discounts for businesses with large monthly payment volumes. The major accepted payment methods are international credit cards and alternative online money transfers.

However, the benefit of setting up the payment gateway system is that it ensures fraud protection and credit card data portability and facilitates flexible currency conversion.

2.8. eWay

eWay is a payment gateway setup that offers an all-in-one online payment platform to all e-commerce and small-scale businesses in Singapore. It provides out-of-the-box (i.e., smooth and seamless) payment options for e-commerce in Singapore.

2.9. AisaPay

AsiaPay is one of the largest online payment options for e-commerce in Singapore. It offers several payment solutions, including mobile payments, e-vouchers, recurring payments, virtual terminals, pre-payment, and game payments.

3. Buy Now, Pay Later (BNPL)

Buy Now, Pay Later (BNPL) is popularly evolving as an alternative payment option for e-consumers of e-commerce Company Formation In Singapore. Simply put, it is a secured payment method that allows the breaking down of payments into instalments at 0% instalment rates. Some of the BNPL Payment providers are:

3.1. Atome

Atome is a popular buy now, pay later payment providers offering merchant discount rates.

3.2. Hoolah

Hoolah is also an online buy-now, pay-later payment gateway that facilitates payment in 3 monthly instalments. Generally, the e-commerce site receives the full payment within 4 days from the date customers make the purchase.

Advantages & Disadvantages of Payment Options for E-Commerce in Singapore

Some of the advantages and disadvantages of setting up a merchant and third-party account as one of the payment options for e-commerce in Singapore are provided below:

MERCHANT ACCOUNTADVANTAGESDISADVANTAGES
Eases payment transactionHigh cost of setting up
Ensures protection against fraudCertain hidden fees
Faster process for payment settlementDisputes are self-handled
Provides merchant name on the transaction statement
THIRD-PARTY ACCOUNTNo requirement for prior approvalHigher setup cost
Disputes are handled together by merchant and third-partyMention of third-party name on the transaction statement

Conclusion

Choosing the right payment options for e-commerce in Singapore is one of the most crucial decisions an online business must make. Setting up either a merchant or a payment gateway account facilitates the payment options for Singapore-based e-commerce business firms. Also, choosing the best payment method for e-commerce in Singapore is considered the only step that facilitates the speedy processing of payments and checkouts.

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FAQ’s

  1. What payment methods does Singapore use?

    Singapore is currently using the most preferred payment methods, such as credit/debit card payments and digital wallets.

  2. Which method of payment is suitable for e-commerce?

    Bank transfers, COD (Cash on Delivery), payment gateways, and merchant accounts are the most suitable payment options for e-commerce in Singapore.

  3. What is the digital payment method in Singapore?

    Google Pay, FavePay, GrabPay, DBS PayLah!, SingTel Dash, EZ-Link Wallet, SamsungPay, ShopeePay, GTPay, PayPal, Strike, and AisaPay are some of the common methods that facilitate digital payment in Singapore.

  4. What are online payment solutions for e-commerce?

    Online payment solutions use technologies to facilitate customers' payment for the products and services they choose.

  5. What payment gateway app is used in Singapore?

    Airwallex, PayPal, Stripe, Adyen, and Shopify Payments are some of Singapore's prominent payment gateway apps.

  6. What is the FAST payment system in Singapore?

    FAST, which stands for fast and secure transfers, is a new electronic fund transfer service that enables the transfer of Singapore dollars by the customers of the participating banks to another bank in Singapore.

  7. What are G3 payments in Singapore?

    The G3 payment scheme in Singapore authorizes banks and financial institutions to process low-value payments & maximize their real-time ability to deliver innovative and commercially attractive products with minimum settlement risk.

  8. What factors must be considered before choosing a payment gateway in Singapore?

    Before choosing a payment gateway in Singapore, factors including transaction fees, accepted payment method, technical integration, user experience, scalability of payment gateway, and security and compliance must be considered.

  9. Whether UPI payments accepted in Singapore?

    Yes, UPI payments are accepted in Singapore.

  10. How can Indians pay in Singapore?

    Indians in Singapore can pay by using a UPI user account, becoming a member of Singapore PayNow, using a Singapore user mobile number, or using a virtual payment address (VPA).

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