As e-wallets gain popularity in the region, credit cards are fighting back in a push to stay relevant through rewards, reduced fees, and improved customer experiences on digital and mobile.
2019 is a key year. This may be the year when mobile payments are expected to overtake credit cards as the preferred ways to pay for e-commerce, according to a UN report. In the face of rising penetration of e-wallets, traditional banks are finding new ways to innovate in the credit card space.
«Credit cards are getting more creative. Local banks DBS and UOB offer credit cards marketed specifically to women, while others highlight the benefits of using a credit card to help offset your carbon footprint,» said Rohith Murthy, founder of SingSaver, a financial comparison platform.
Partnerships With E-Commerce Platforms
While e-wallets may be offering the ease of mobile payments through store partnerships and rewards across Singapore, credit cards are also turning to tech and digital to improve their offerings. For example, some banks are going entirely digital with virtual cards that reduce application approval times from days to minutes and are specifically aimed at e-commerce purchases.
Others, however, are tying up with tech companies to add perks and touch points. «Apple recently partnered with Goldman Sachs in a digital tie up that removed fees, added transparency, and offered a slew of perks; a trend that will only grow,» added Murthy.
Credit Card Still Popular in Singapore
In Singapore, 7 in 10 Singaporeans own at least one credit card, according to a study by market research company YouGov.
Singaporeans had a total outstanding credit card and personal loan debts of about S$70.4 billion, according to the Department of Statistics Singapore (2017).
Cashback Still Top Reward Choice
Singsaver's most recent data shows that cashback is still the top credit card reward choice among consumers as consumers continue to favor the flexibility and ease of cashback as a reward when using financial products such as credit cards.
Nevertheless, miles, as a reward form is getting increasing traction due to many air miles credit cards lowering their annual income eligibility in the last 1-2 years and the promise of air miles for traveling and exploring new destinations.
«With better travel connectivity and affordability, as well as with the surge in travel interest in part due to social media, we think Singaporeans are going to be more knowledgeable about the benefits and attractiveness of miles as a reward,» said Murthy.
