Monthly card sales increased 7% after adopting cashless payment methods.
The introduction of mobile wallets like DBS’ PayLah! has spurred the use of mobile payments which small entrepreneurial firms benefit from the most, according to a study by the National University of Singapore (NUS) Business School.
According to the study, consumers use mobile wallets primarily for small amount transactions of less than $100. The weekly count of such small-amount transactions was found to have increased 114%, whilst larger transactions which amount to more than $100 surged 88%.
The study found that small merchants receiving these small-sized payments experienced a significant 7% increase in monthly card sales amount after the adoption of the QR code technology. Credit and debit card sales for small merchants also increased 3.4%.
“New entrepreneurs who have just started their business benefit more from the low-cost and convenience offered by new technology,” NUS Business School said in a statement. “Newly established small stores increased monthly card sales amount 11% compared with 2.1% growth amongst the more established small merchants.”
As for the types of goods paid for using cashless technology, the spill-over effect from the payment convenience of mobile wallets was observed across all categories including durable goods, apparel and entertainment. Amongst small merchants, dining providers saw the largest increase in total card sales at 12.6%.
Also read: Singaporeans ditch bank visits to go mobile
“The development of mobile payments plays a critical role in Singapore’s goal of becoming a cashless society,” NUS professor Sumit Agarwal said in a statement. “The findings also provide important input for discussions about fintech and digitalisation by offering new insights on the real economic effect of improved payment convenience and efficiency.”
The transaction value of mobile point of sale (POS) payments in Singapore has more than doubled from $298.68m (US$218m) in 2016 to $643.95m (US$470m) by the end of 2017, data from Statista showed.
NUS Business School’s study analysed a variety of bank activities for 250,000 randomly chosen customers including transaction amounts and times, as well as the name of the merchants. Data spanned a 24-month period from January 2016 to December 2017.
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