More S’poreans opting for ‘buy now, pay later’ to indulge in travel

SINGAPORE – Travel takes the top spot in Singaporeans’ spending priorities for non-essential items, with most willing to fund their expenses through instalment payment options such as buy now, pay later (BNPL) schemes, showed a recent survey.

BNPL services generally allow consumers to spread out their payments at zero interest, but charge late fees. They take a cut from merchants for each sale.

Analysts and industry players told The Straits Times that consumers are increasingly opting for such services because of their convenience. 

But some said safeguards need to be in place to protect users.

A recent survey by travel tech company Amadeus found that 46 per cent of consumers said international travel is a priority area for spending in the coming year, much more than fashion, eating out and big-ticket items such as a new car.

Eating out was important to 37 per cent of the 500 Singaporeans polled in June, while 29 per cent prioritised fashion purchases, and just 24 per cent wanted to spend on big-ticket items such as a new car or home furnishings.

The respondents were aged 18 and above and had a range of income levels.

The survey also found that Singaporeans have the most appetite for international travel, coming ahead of German, French and US consumers.

A total of 4,500 consumers in France, Germany, Britain, the United States and Singapore were polled for the survey.

Singaporean travellers are more likely to spread out their expenses to avoid high foreign exchange transaction fees and dip into loyalty points they previously collected, showed the survey.

About 95 per cent said they might choose instalment options such as BNPL services to fund their travel over the coming year, topping the global average of 75 per cent.

This figure also beats the 57 per cent of those polled here who said they might use a credit card.

Ms Barbara Crane, KPMG in Singapore’s financial services advisory partner, said the professional services firm is increasingly seeing companies offer BNPL options for travel purchases in addition to online or in-store ones.

“There is considerable pent-up demand for travel, and BNPL providers are also counting on this as an area where consumer demand is expected to persist for some time.”

Ms Crane, noted, however, that more younger consumers are choosing such platforms to stretch their dollar further amid higher inflation and recession fears.

“Similar to any mode of payment, consumers on BNPL can face the risk of overcommitting themselves on expensive travel experiences… Key to this is regulators and industry players balancing the risk, so that it does not lead to an increase in per capita debt.”

The Singapore FinTech Association formed a working group with industry players in March to develop a code of conduct for the industry, with a focus on safeguarding consumers’ interests.

The association’s president Shadab Taiyabi noted that shoppers use BNPL services to purchase a diverse range of products and services, including higher-value items such as airline tickets.

BNPL players here such as ShopBack PayLater, Atome and Pace have seen an increase in travel-related transactions.

Mr Arvin Singh, co-founder of hoolah, which was acquired by online cashback platform ShopBack and integrated as ShopBack PayLater, said flight tickets come out on top among customers using ShopBack PayLater for travel.

A Grab spokesman said the company has seen an increase in holiday-related spending on items such as electronic accessories and apparel via its PayLater service.

“For Grab, safeguards to protect consumer interests include a qualifying assessment of consumers before they are offered PayLater, individually determined limits to minimise the risk of overspending, and policies to deter debt spirals where PayLater accounts will be paused if users miss a payment,” said the spokesman.

An Atome spokesman said the number of transactions by its customers on travel booking platform Agoda had grown by an average of 60 per cent, and those on Klook by 50 per cent, in the past three months, since border restrictions were lifted in most places.

“Consumers usually plan ahead for their travel, such as during peak holiday season, so BNPL really helps them… to manage their monthly budget,” said the spokesman.

Pace’s founder and chief executive Turochas Fuad said the company has seen greater interest this year from travel industry merchants looking to implement BNPL as a payment option.

He added: “The top categories of spending in the travel sector are for flights and accommodation, and we’ve also seen increased usage of Pace Card with brands such as”