Singapore has been working to increase the volume of non-cash payments since way back in 1985. And since then, people have become increasingly used to cash-free spending, from paying bills and shopping, to getting the MRT and grabbing a coffee. However, merchant fees for card payments have proved a barrier at times to improved uptake.¹
Merchant fees for card payments haven’t gone anywhere. That said, there have still been changes in consumer behaviour, thanks to ongoing public and governmental support for a move to cash-free, and alternatives to traditional card payment terminals.
In fact, MAS statistics show that the number of card transactions continues to rise year on year. The latest statistics show the first half of 2020². The global pandemic was causing huge changes to tourism and personal spending - but card payment numbers have increased, thanks to businesses moving away from handling cash, and an increase in contactless payment options.
If you’re not accepting card payments for your business yet, now might be the time to start. Here’s everything you need to know about credit card merchant fees in Singapore.
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Accepting card payments within Singapore will probably mean you have fees to pay. And as a business owner you’ll be looking for ways to cut the costs involved in running your business, to maximise profit and allow you to invest and grow your operation. Wise can help.
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Using your card to make a purchase is simple for customers, and can be safer than carrying cash. As a merchant, taking card payments makes sense too. Simply have your customer tap, swipe or scan and you’re done. No handling money, making cash deposits, or counting out change.
However, the processes which sit behind card payments are somewhat more complex. There are several different parties involved in making sure the money comes from and goes to the right place. That means that there are fees to pay for the services offered by these providers.
To give an example - maybe a customer wants to pay with their OCBC issued Visa card, and you have a merchant agreement with DBS to get a payment terminal. The parties involved here include the card issuer (OCBS), the network (VISA), and the acquirer. That’s DBS in this case - the provider which has issued the terminal and will process the payment.
As a merchant for every transaction you’ll probably need to pay a fee to the acquirer you use, as well as the network that issued the payment card. This is usually wrapped up in a MDR - merchant discount rate. This MDR is the amount - normally shown as a percentage - you’ll pay for each card transaction you process. On top of this per transaction fee, there are likely to be other costs to think about, to get set up for card payments in person or online.
Here are some of the common fees you should look out for and consider when choosing how to set up card payments for your business:
- One time setup fee
- Annual/monthly fee
- Terminal rental fee - security collateral may also be required
- Service fees for installation or maintenance of terminal
- Merchant discount rate (MDR) per transaction - varies by card and business type. Includes interchange rate paid to network ³ ⁴
- QR code generation and use fees
- Statement fee
- Cancellation fee
One approach for merchants is to add a card surcharge which is charged to customers when they choose to pay by credit, and in some cases, debit cards. This can help merchants recoup some of the costs of offering card payments - but it can also cause customers to be dissatisfied. In the long run, this may mean less business, and lower profits. It’s also worth noting that surcharging may be subject to restrictions by card networks - check with your chosen bank and the networks you’ll be accepting payments on.
The actual fees you’ll pay to process card transactions will depend on a few factors. Costs can vary by business type, acquirers have different charging systems, and the volume of payments you process may also matter. Do some research before you choose how to set up card payments for your business. To help paint a picture of what to expect, we’ll cover the fees for one major acquirer - DBS. ⁵
|Fee type||DBS cost for ecommerce merchants|
|One off charge||SGD800 +GST|
|Annual fee||SGD1,000 +GST|
|MDR||Visa / MasterCard / JCB / UnionPay / Recurring / Batch Processing Transactions - 3% Instalment Payment Plan - 4% DBS Paylah! - 2%|
|Fee type||DBS cost for in person payments|
|One off charge||SGD300 +GST|
|Annual fee||SGD240 +GST|
|Wired terminal rental fee||SGD667.10/year - security collateral may also be required|
|MDR||Visa / MasterCard / JCB / UnionPay - 2.5% for retail shops, and 3% for service businesses Instalment Payment Plan - 3% to 4%|
You may choose to use the service from a bank directly when looking for an acquirer to allow card payments for your business. However, there are also other options. Here are some to consider.
NETS is Singapore’s national debit card payment scheme, and supports payments from most major Singapore banks ⁶. You can accept NETS payments using a terminal, take ecommerce and mobile payments, and process QR payments. Here are some of the costs you should think about if you want to use the NETS terminal - check out the full pricing online.⁷ ⁸
|Fee type||NETS cost|
|Set up fees||Set up costs include: Deposit - SGD200Installation and activation - from SGD60 per terminal|
|Monthly subscription fee||Terminal payments - SGD38 + SGD12 to enable credit card payments Mobile payments - up to SGD28|
|Transaction fees - terminal payments||0.8% NETS fee, plus additional costs depending on payment type. For example: Credit card payments - 2.99% to 3.5%UnionPay card - 1.8%|
|Transaction fees - mobile and ecommerce payments||eNETS Credit - 3.4% + SGD0.50 eNETS IDD - 3.5% + SGD1.50 Different fees apply for hawker centres, food and beverage outlets and charities|
|Other costs and features||SGD30 for early termination Fees for lost or damaged items including the terminal, adapter and cable|
Another option from NETS which may appeal is to use the QR payment system.⁸ You can generate your own QR code, for customers to scan and then pay using popular mobile payment apps like Paylah!, OCBC Pay Anyone or UOB Mighty. In this case you don’t pay a monthly fee, but do pay a 0.8% transaction fee.⁹
A final option to think about is GrabPay. GrabPay is popular among customers and allows simple mobile payments on the go. Grab doesn’t disclose the MDR it uses online, but implies that 1% is an average cost through the FAQ it provides¹⁰. Apply to become a GrabPay merchant to learn more about what you’d be charged to accept payments through Grab.
Taking card payments makes good sense for your business. Take some time to research different options including traditional payment terminals and modern mobile payment solutions. You’ll find the right one for you out there.
And don’t forget - if you’re taking or making payments in foreign currencies, you can save money with Wise for business.
- The New Paper - For businesses in Singapore, cash is still king
- Monetary Authority Singapore (MAS) - H1 2020 Retail Payment Statistics for Selected Payment Systems and Industries in Singapore
- Visa - Rules + Interchange
- Mastercard - Merchant Interchange Rates & Fees
- DBS - Pricing for merchant services
- NETS Group
- NETS Group - Service fees
- NETS Group - SGQR
- NETS Group - Price sheet
- GrabPay - Understanding GST and MDR - Merchant
Sources checked on 23 February 2021
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