Singapore's small merchants benefit most from mobile wallet use: NUS survey

Singapore's small merchants benefit most from mobile wallet use: NUS survey

Researchers find the introduction of DBS Bank’s PayLah! mobile wallet in April 2017 resulted in the doubling of the use of mobile payments.

New entrepreneurs have been able to acquire more customers while small stores have benefited relatively more from the cost savings and efficiency gains from QR code payment methods, according to a study by the National University of Singapore.

SINGAPORE: The introduction of mobile wallets like DBS Bank’s PayLah! has helped spur the adoption of mobile payments, with small merchants the main beneficiaries, according to a new study by the National University of Singapore (NUS) Business School.

Released on Thursday (Dec 13), the study found that the introduction of PayLah! in April 2017 doubled the use of mobile payments, particularly for smaller transactions amounting to less than S$100. 

The weekly number of such transactions increased by 114 per cent, compared with larger transactions of more than S$100 which went up by 88 per cent, it showed.

READ: Going wallet-free in Singapore for a weekend

Credit and debit card sales for small merchants, in particular, saw a boost from the introduction of PayLah!’s QR code technology, the study added.

This business demographic saw an average increase of 3.4 per cent per month in the value of credit and debit card sales during the 9-month period after the technology was introduced, compared with the first two months of 2017 before the launch.

New entrepreneurs also gained from the introduction of the mobile wallet, with monthly card sales amount increasing by 11 per cent, compared to the 2.1 per cent growth among more established small merchants.

The research was led by Professor Sumit Agarwal, together with Professor Bernard Yeung, associate professor Qian Wenlan and Hong Kong Baptist University’s assistant professor Zou Xin.

They studied an anonymised dataset containing a variety of bank activities for 250,000 consumers from a leading local bank, and analysed local transactions from randomly chosen customers. These include transaction amounts and time, as well as the name of the merchant. 

The data spanned a 24-month period from January 2016 to December 2017, with the consumers transacting with more than 45,000 different merchants during that time.

It was not obvious from the data that PayLah! helped merchants to grow sales though, the study pointed out.

The QR code mobile payment method promoted sales growth primarily for new businesses by enabling them to acquire more customers, it added.

“The development of mobile payments plays a critical role in Singapore’s goal of becoming a cashless society,” said Prof Agarwal.

“The findings also provide important input for discussions about financial technology (fintech) and digitisation by offering new insights on the real economic effect of improved payment convenience and efficiency.”

Electronic payments, including mobile-based ones, was highlighted as a priority for Singapore by Prime Minister Lee Hsien Loong during his National Day Rally speech in 2017. Since then, a raft of initiatives have been introduced, including the rollout of a unified QR code – SGQR – to spur adoption of such payment methods.

Source: CNA/kk(rw)

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