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When the first credit cards burst onto the scene in the 1950s it would have been hard to imagine a payment method that would match them in terms of benefits: safety, practicality and speed. But the world in which we live in 2019 has changed, and Fintech is the latest trend causing a stir when it comes to the way we pay for things. Clever developers have been devising applications that allow us to make mobile payments from our cell phones. With its many advantages, this payment method is set to be the future of finance, with experts predicting we will be using apps and e-wallets to manage all our finances in the near future.
Singaporean Spending
That said, in Singapore, spending habits are yet to be dramatically changed, according to a Global Payments Report by Worldpay. Singaporeans currently favour credit cards for both their on and offline purchases, with 67% of payments being made this way. Comparatively, e-wallets amassed only 10% of transactions.
When it came to offline sales, cash came out on top with 40% of transactions, suggesting Singaporeans still have a way to go before this new technology is adopted. Credit and debit cards collectively made up 53% of transactions, and e-wallets were used for only 4% of in-store sales. The report acknowledged that Singaporeans are in general early-adopters when it comes to tech and that they foresee the improvement of mobile payment’s fortunes as we move into 2019. Forecasts suggest that around 50% of online transactions in Asia-Pacific will be made by mobile payment by the end of the year, as customers get to know the technology better and come to trust it.
As we enter this period of change, let’s review the pros and cons of credit card versus mobile payment for the Singaporean user.
“Mobile Payments”
Convenient
Mobile Payment is super convenient as your digital wallet stores all of your information securely in one place. You’ll not only have access to your bank account and credit card, but you will be able to use your Paypal account or any other online account you may hold. You can even transfer your reward cards, gift cards, coupons and store loyalty cards to your e-wallet, so you’ll never get to the checkout and realise you’ve left your card at home and are missing out on a rake of points again. Or realise you had all those coupons saved up but left them in your jeans pocket. Rather than carry around a bunch of cards in your wallet, everything is handily stored in your phone.
Secure
Whilst a thief can steal your credit card and use it with relative ease, the same thief would not only have to steal your phone but somehow get past your home screen pin code and fingerprint security in order to complete a transaction, suggesting mobile payments are much safer. As users get used to biometrics, they are becoming the most secure way to keep your sensitive data private and saves you having to remember so many long complicated passwords.
It is also much easier to track a lost phone than a lost credit card, using find my phone services.
The way the transaction takes place also offers you more discretion and security. The apps do not send the store your credit card details, instead, the information is tokenised, meaning a hacker couldn’t do anything with the data if they did manage to access it.
Fast
Mobile payments are much faster than credit card payments. They are also more likely to become widely available as small retailers don’t need to invest in any new gadgets to process payments, everything can be handled on their existing smartphone with the help of a few new apps.
“Credit Card Payment”
Always Accepted
Credit card payments are the most widely accepted form of payment after cash. The uptake of mobile payment has not been as rapid as hoped, so users may find they are disappointed when they go to the checkout, phone in hand. For example, only 36% of retailers in North America accept Apple Pay at present. The figure is growing all the time, but it will be a little while before mobile payments are as ubiquitous as credit card handsets.
Most common credit cards are accepted for payment wherever there is the option to pay by card. So whether you hold a Visa or a Mastercard, you won’t struggle to make a payment. In contrast, as there are several different, competing e-wallet applications including Apple Pay, Google Pay and Samsung Pay, stores may not accept your chosen e-wallet in a bid to promote their own. This could also present a problem when you upgrade your phone, as transferring your wallet over might cause headaches a wallet of credit cards never could.
Simple to use
What’s more, for the user, credit cards don’t require any further technology to complete a transaction. Whereas it may be that your mobile phone is not equipped with the necessary technology to complete mobile transactions. The NFC tech that allows your cell phone to speak to the payment terminal will only be present in newer and more premium handsets.
Backup
With a wallet full of physical credit cards, if one does not work or gets lost or stolen, you always have a spare, a backup in case you land in trouble. Whereas, if you find yourself without your phone, perhaps it is lost or stolen or the battery dies, you have no way of paying, no backup.
It is fair to say that the minor teething problems when it comes to mobile payments will be ironed out as uptake of the new technology improves. That said, credit cards are a trusted option that will always be useful as a primary payment method if not a handy backup when e-wallets really take off.
Here are some other interesting articles you should check out:
・Best Credit Cards For Fresh Grads in Singapore
・Best cashback credit cards in Singapore (2019)
・The 5 Most Luxurious Credit Cards in the World
