Why businesses must win the trust of Singapore’s Gen X in digital payments

This article was first published in The Business Times. 

To drive the country’s digital ambition, this critical cohort must go cashless

The gross merchandise value (GMV) of Singapore’s digital economy is estimated to rise from US$29 billion in 2024 to between US$40 billion and US$65 billion by 2030.

Amid this general optimism, however, there is one generational outlier still impacting growth in Singapore. While 92 per cent of Singaporeans have used an emerging digital payment method in the past year, only 42 per cent of Generation X consumers are open to using new payment methods such as digital wallets and QR codes over more traditional payment methods, indicated the Mastercard New Payments Index (NPI).

This reluctance is uniquely stark. In Vietnam, 73 per cent of this cohort is open to new payments, along with 58 per cent in both Thailand and Indonesia. The gap is also clear in social commerce adoption, where just 15 per cent of Singapore’s Gen X prefer purchasing through social apps, versus more than 50 per cent in Thailand and Vietnam.

For Singapore, closing this digital gap is crucial. According to research agency Kadence International, the country’s one million strong Gen X wields an estimated S$30 billion in annual spending power and shapes household spend, especially in multi-generational households where they are often the key purchase decision-makers.

Their caution around innovative payment solutions presents challenges to Singapore’s digital economy aspirations and could also slow Singapore’s Smart Nation ambitions.

Why Gen X matters

Born between 1965 and 1980, Gen X make up the second-largest generational cohort in Singapore, according to SingStat. Increased digital adoption among this demographic will go a long way to help accelerate e-payment growth and amplify network effects that drive fintech innovation and investment attractiveness.

For example, Singapore’s prepaid card and digital wallet market is projected to grow at 11.2 per cent annually, reaching about US$10.74 billion by 2025, with continued growth expected till 2029 on the back of rising adoption and fintech innovation. With the pace and scale of this growth depending on adoption across all demographics, broader engagement from Gen X will expand the market and strengthen the fintech ecosystem.

Gen X is also a major contributor to Singapore’s Smart Nation vision of creating a digitally inclusive society with seamless, efficient digital services. Digital payments are a cornerstone of this vision, with initiatives such as the Singapore Payments Network seeking to enable faster, interoperable and more resilient digital transactions, nationally and cross-border.

Bringing more Gen X on board will reinforce cross-generational social inclusion and maximise the efficiency and reach of the government’s ambitions in this area.

However, while Singapore’s Gen X are open to technological advancements, they are still loyal to more familiar analogue experiences. This generation came of age in an era of cash and cards, and their overall satisfaction with these traditional payment methods is slowing their adoption of digital wallets.

Unlocking the potential of Gen X

Businesses need to tailor their strategic approach to align with the digital habits, values, and purchasing preferences of Singapore’s Gen X. Security and digital trust need to be front and centre.

Cyber security company Trend Micro’s latest consumer behaviour study found that the “sandwich generation” – adults aged 35 to 55 – are particularly at risk for online scams. As many juggle care responsibilities for both children and ageing parents, scammers often prey on their time pressures and emotional stress.

Integrating secure and convenient solutions into the check-out process will be key to driving behavioural change. In Singapore, we have seen how biometric authentication such as fingerprint recognition and facial verification is helping ease consumers’ security concerns around contactless payments.

The NPI report noted that 77 per cent of Singaporeans agree that using biometric technology for payments is more secure than two-factor authentication, while 80 per cent say using biometrics for identity is more secure than a personal identification number, password, or other form of identification.

Businesses need to build on this consumer confidence and further integrate biometrics into their transaction processes, adding a further layer of security and building greater trust with Gen X.

A hybrid approach to digital engagement

Digital trust can also be improved by adopting a hybrid approach to payments that balances new and innovative solutions with more familiar, trusted options, engaging with Gen X’s unique attachment to both analogue and digital experiences.

For example, linking physical cards with secure mobile wallets allows Gen X consumers to maintain a well-established payment method, while also experimenting with digital-first options.

In the same way, businesses could offer attractive, real-world incentives in areas such as groceries, travel and dining, which reward the use of digital payment applications. We saw this with the roll-out of PayNow in 2017, when participating banks offered cash rewards to incentivise individuals to register their mobile number or identification numbers with PayNow.

Loyalty programmes play a key role. At a global level, Gen X is 13 per cent more likely to use such programmes than the average consumer, said consumer research company GWI. Loyalty programmes that maintain authentic, long-term relationships with this demographic and combine digital convenience with personalised and practical rewards can therefore expand their customer base.

With the right mix of trust, security and tailored rewards, leveraging the financial potential of Singapore’s Gen X will accelerate the growth of digital payments in the country. This will, in turn, unlock new business opportunities within the digital economy and advance Singapore’s ambition to be a cashless, tech-forward economy under the Smart Nation banner.