The amount of funds transacted via e-money in Singapore increased at compound annual growth rate (CAGR) of 14 percent between 2004 and 2008, driven largely by the proliferation of e-money and cards for contactless payments, according to a new report Thursday.
Released by U.S. financial research and consulting firm Celent, the study also noted that fewer people in the country were using cash to make purchases.
Celent said the aggregate amount of e-money transactions exceeded total cash withdrawals from automated teller machines (ATMs), where the value of transactions conducted via these machines expanded at a CAGR of 8.8 percent from 2004 to 2008. The number of ATM transactions went up only 2.8 percent over the same five-year span, though there was a 19.4 percent growth between 2006 and 2008.
The use of debit cards for payments also saw significant growth where the amount of funds transacted via these cards more than doubled between 2004 and 2008, growing at a CAGR rate of 22.1 percent.
Paper-based transactions, however, still prevail among corporations.
Celent reported that about 71 percent of transactions were still conducted using cheques, with businesses the biggest user. The aggregate amount of funds transacted with the paper-based mode grew even though the number of such transactions dropped marginally by 0.96 percent.
The consultancy firm also observed that Singapore's e-money industry is set to see further growth, fueled by further competition in the contactless e-payment services market, which include e-payment service provider and debit card issuer, Nets (Network for Electronic Transfers), which began combining its debit functionality with stored value.
Celent also pointed to the Singapore government's efforts in spearheading the development of Contactless e-Purse Application (CEPAS) in January 2009, to set new standard specifications pertaining to e-money transactions. It noted that such initiatives will help spur the shift to a single e-money card to be used for all transactions island-wide including retail and public services.