Singapore SMEs still rely on cash despite card-heavy e-commerce market

About 33% of SMEs reported high cash usage, even as cards dominate online payments.

Singapore SMEs continue to rely heavily on cash despite operating in Southeast Asia’s most card-dominated ecommerce market, according to an IDC InfoBrief sponsored by 2C2P by Antom.

The report found that 33% of SMEs in Singapore reported high cash usage, the same level as Vietnam and higher than Indonesia at 30%, the Philippines at 27%, Thailand at 19%, and Malaysia at 14%.

IDC said this was unexpected in an advanced market such as Singapore, suggesting that some SME segments remain reluctant to shift to digital payments or continue to face barriers to full adoption.

Singapore’s e-commerce market was valued at $9b in 2024, with SMEs accounting for 33% of sales.

Singapore also stood apart from its Southeast Asian neighbours due to its long history of card usage in e-commerce. Cards accounted for 72% of Singapore’s e-commerce gross transaction value in 2024, and this share is expected to rise to 73% in 2026 and 76% by 2029.

By comparison, the use of other payment methods remains lower in Singapore than in many neighbouring markets.

Alternative payments such as cash are expected to fall from 4% of ecommerce payments in 2024 to 0% by 2029, whilst buy now, pay later is projected to edge up from 5% to 6%.

Still, Singapore SMEs face several barriers to wider digital payment adoption. About 36% cited data security and fraud concerns, 33% pointed to integration complexity, and 29% said their preferred payment options were unavailable in the local market.

Their current payment systems also present operational challenges. The top issues cited by Singapore SMEs were high fees at 33%, slow payouts or settlements at 32%, and payment systems not being optimised for mobile at 31%.

About 47% said their payment systems can handle new trends over the next few years, the highest share amongst the six markets covered. However, 53% said they would still need to make additions or switch systems.

Across Southeast Asia, e-commerce is projected to grow from $156.3b in 2024 to $289.8b by 2029, representing a 13.2% compound annual growth rate. This would make the region the world’s second-fastest-growing e-commerce market after India.

SMEs accounted for 57% of Southeast Asia’s e-commerce in 2024, a share expected to rise to 58% by 2029.

Meanwhile, non-digital ecommerce payments across the region are projected to shrink from 11% in 2024 to 3% by 2029 as digital wallets, real-time payments, local payment schemes, and BNPL gain further ground.