Money-savvy consumers in Singapore now have an even better way of saving money: mobile wallets. According to a recent study by JD Power, usage of mobile payments has grown by 53% in 2017, and now 40% of credit card holders in the country use mobile wallets to make payments. And there's a good reason for it: you can save more by using contactless payment instead of traditional credit card or cash payment.
Banks Offer More Rewards for Mobile Payments
In the past year, banks have been increasingly offering more rewards to consumers that use mobile wallets to pay for things. For example, OCBC Titanium Card, which used to offer 4 miles per S$1 spent only on shopping, extended the same offer to every S$1 spent on mobile payments like Apple Pay, Android Pay and Samsung Pay, effectively increasing its versatility. Similarly, most of Standard Chartered's credit cards now can be used for mobile payments and offer some level of cash back for those expenses as well.
This is a very good news for money-savvy consumers in Singapore. With more than 50,000 Visa payWave and Mastercard PayPass contactless payment terminals, people can now use mobile payments to save extra on many of the daily essentials like dining, groceries, shopping and transportation.
Rewards on Mobile Payments Can Sometimes Exceed Normal Reward Rates
By using mobile payments, consumers can sometimes earn a higher amount of rebate or miles than they would have by simply paying with a card. For example, people can now use OCBC Titanium Rewards Card to earn 4 miles per S$1 spent at supermarkets, on Grab rides or even at shops and restaurants, which is much higher than what they would've earned with most other miles credit cards that tend to provide around 1.2-1.4 miles per S$1 spent locally. Not only that, consumers can save more by taking advantage of the fact that many of the online services now accept Applye Pay or Samsung Pay when transactions occur on a mobile device. For example, consumers could save a respectable 8% on Grab rides by using Citi Cash Back Credit Card as their method of payment. But, they could save more by using their Apple Pay that is linked to a card like DBS Live Fresh Card that provides up to 10% rebate on contactless transactions.
A Lasting Trend or Temporary Benefit?
JD Power's study also found that lack of rewards and loyalty points and low merchant acceptance at retail stores are the main factors hindering mobile wallet adoption. Given that mobile wallets are just much more convenient for consumers and also that more retail points are accepting mobile payments, it seems likely that banks will continue to cater to mobile-savvy consumers to attract more customers. Once mobile payments are already widespread, banks could reasonably pull back on their mobile-specific rewards. However, at least for now, the trend seems to be that general purpose cards and online shopping cards will become more mobile friendly.
This was first published at Value Penguin's website, "How Contactless Mobile Payments Can Help Singaporeans Save".