Razorpay’s steering feature and SGQR+ infrastructure accelerate QR and PayNow adoption to cut payment costs.

Singapore’s credit card interchange fees—reaching up to 3.4 percent plus S$0.40 per transaction—are driving merchants to adopt lower-cost account-to-account payment methods via PayNow and QR codes, as demonstrated by Razorpay’s new checkout steering feature and the expansion of SGQR+ infrastructure. The Monetary Authority of Singapore (MAS) has responded to merchant concerns over card fees, actively pushing retailers toward SGQR adoption as a cost-reducing alternative, according to policy reports (Source 2).

Card Interchange Fees Drive Merchant Cost Pressures

Credit cards remain the most expensive online payment method in Singapore. Razorpay, a payments platform with growing Southeast Asian operations, reports that card fees can reach up to 3.4 percent plus S$0.40 per transaction (Source 3). This cost burden is significant for merchants operating on thin margins, particularly in sectors like food and beverage and retail where transaction values are often small.

PayNow offers a substantially lower-cost alternative. Razorpay’s head of Southeast Asia, Angad Dhindsa, noted in a statement that merchants are “looking for practical levers that improve the customer journey without any additional complexity,” with payment costs a key concern (Source 3). The Monetary Authority of Singapore has acknowledged the issue, and its policy stance is pushing retailers toward SGQR adoption as part of broader efforts to reduce systemic payment costs across the economy (Source 2).

The cost differential is most acute for high-volume, low-value merchants. Field research conducted at hawker centers including Albert Food Centre and 85 Fengshan Market found that fixed transaction costs disproportionately affect merchants processing small-value, high-volume transactions, many of whom currently bypass corporate payment infrastructure entirely by using personal PayNow QR codes to accept payments (Source 4).

Account-to-Account and QR Payments Gain Traction

Razorpay launched a feature that lets merchants present discounts at checkout to steer users toward cheaper payment methods like PayNow (Source 3). The steering mechanism is designed to address two problems simultaneously: high abandonment rates and payment cost pressures. Abandonment rates in Singapore fashion retail have exceeded 85 percent this year, well above the global average of approximately 70 percent, according to Razorpay data (Source 3). By presenting discounts at the final decision point, merchants can encourage shoppers to complete purchases while shifting volume to lower-cost rails.

The SGQR+ scheme provides the underlying infrastructure for this shift. It comprises two tracks: the Master Merchant Acquirer track operated by NETS, and the Interoperable Switch track operated by Liquid Group (Source 4). Many hawkers already use personal PayNow QR codes to accept payments, a practice that will be unaffected by fee changes for PayNow Corporate (Source 4).

Cross-border QR connectivity is also expanding. OCBC will enable customers to scan Weixin Pay, Alipay+, and UnionPay QR codes in China via its Singapore mobile banking app by the first quarter of 2026 (Source 6). This positions OCBC as the first Singapore bank to offer comprehensive QR payment coverage across China’s dominant payment ecosystems, capturing rising travel and spending flows.

Infrastructure and Regulatory Support Underpin Adoption

Singapore’s national payment infrastructure provides the backbone for A2A and QR adoption. NETS, operating through Banking Computer Services Pte Ltd (BCS), manages and operates the national clearing and payment infrastructure, including FAST, Interbank GIRO, eGiro, Cheque Clearing, PayNow, and the SGQR Central Repository (Source 4). MAS actively promotes e-payment initiatives including SGQR, FAST, and PayNow as part of its broader digital economy strategy (Source 7).

Cross-border real-time payment linkages have expanded significantly. Singapore has live connections with Thailand (April 2021), India (February 2023), Malaysia (November 2023 for real-time payments, March 2023 for QR), and Indonesia (November 2023 for QR) (Source 7). Cross-border QR code connectivity is operational with Thailand, Malaysia, and Indonesia, enabling tourists to pay using their home wallets at Singapore merchants and vice versa (Source 7).

Source: Orionmano Industries

Profitability Shifts from Transaction Fees to Merchant Integration

The economics of payment processing in Singapore are evolving. HitPay CEO and co-founder Aditya Haripurkar observed that “profitability is shifting from transaction fees to deeper integration with merchant operations,” as providers focus on improving conversion and increasing payment flow (Source 5). HitPay, which operates in Singapore, Malaysia, and the Philippines, launched Borderless QR in January to allow small businesses to accept payments from foreign digital wallets through SGQR+, activated via a software update without additional hardware (Source 5).

The shift creates differentiated opportunities across merchant segments. Small merchants benefit from no-cost personal PayNow QR codes, while corporate PayNow fees remain unchanged, protecting their cost advantage (Source 4). Razorpay sees its steering feature as part of broader efforts to streamline checkout flows as competition intensifies and merchants look for “clearer, faster and more predictable payment journeys” (Source 3).

OCBC’s first-mover position in China QR payments positions it to capture rising travel spending outflows. The bank leverages NETS infrastructure to support Weixin Pay, complementing existing Alipay+ and UnionPay QR support (Source 6). As cross-border travel between Singapore and China continues recovering, the enhanced QR capability creates a channel for OCBC to deepen customer engagement and capture transaction volume without reliance on traditional card rails.

As Singapore’s payment infrastructure matures and cross-border A2A linkages expand, merchant adoption of QR and PayNow is expected to accelerate, further eroding card rail volumes and reshaping the competitive landscape. The combination of cost pressure from interchange fees, active regulatory support, and new merchant steering tools creates structural momentum for account-to-account payments to capture an increasing share of both domestic and cross-border transaction flow.