Understanding Merchant Fees in Singapore: Exploring the Facts

5月 31, 2021

Managing a business can be a challenging process; there are just so many variables that go into the functioning of a successful business. From keeping up with the latest market trends to exploring competitor strategies, it can be difficult to keep up with everything in the business world. All this information can make it challenging for conventional entrepreneurs to manage their business and minimize unnecessary fees. With the consumer shift away from cash spending and the digital nature of businesses, consumers are increasingly preferring to make digital purchases through electronic payment methods, including credit cards, debit cards, and mobile wallets. This has resulted in digital sales becoming a significant percentage of the sales of most modern businesses. In this digital landscape, merchant fees can add up considerably while managing a business. If not well managed, these fees can have significant impact on their management structure and work-cycles.

In this article, we will evaluate the Merchant Fee phenomenon and explore the different aspects of merchant fees that businesses need to consider while operating in Singapore.

What is a Merchant Fee?

Merchant fees can be considered to be a cost of business that is imposed upon all businesses looking to receive payments from their clients. The merchant fee is the percentage of the transaction amount that is paid to the service provider in lieu of providing payment services.  Merchant fees can exert thousands of dollars of monthly cost on businesses having high revenues. The fees can be a major challenge for businesses throughout their growth phase because of the low-profit margins and increased focus on enhancing revenues.

Merchant fees for accepting card payments in Singapore

Merchant fees can vary for businesses depending on the volume of payments and the nature of transactions. Most conventional providers impose a high merchant fee for businesses that are looking to receive card payments from their customers. The nature of the fee is complex based on the different intermediate charges that go into the entire process. Handling the charges can complex based on the frequency of charges and their nature. The is because the merchant processing industry has multiple layers of intermediate 3rd parties that are involved with the transaction.

The primary fees that go into the process can be categorised into the following areas.

Interchange Fee

The interchange fee is the primary fee imposed by your primary card company on every single transaction. The fee is defined by credit card companies and providers and is centrally split between the card-issuing bank and the network. The standard structure of the fee is divided into a defined transaction fee with an additional percentage of the transaction volume. The specific percentage and amount vary based on the providers and credit card structure, along with other applicable factors.

Additional Fee

The additional fee is a discretionary fee applied by merchant service providers that allow websites to receive payments through credit cards and other payment mechanisms. The fee is also charged as a percentage of the overall sales volume and can include a fixed transaction fee as well.

In the landscape of Singapore, dealing with the applicable fee and structure can be a complex process. The semantics of the merchant landscape is hard to figure out due to the high number of intermediate parties involved in the transaction. For small businesses, it can be challenging to figure out the details because the merchant providers often withhold the information regarding the interchange range and focus primarily on the base rate. This rate often includes the culmination of the all-applicable fees and can result in the customers paying a much higher rate than conventional options. The difference in the contributing rates results in the eventual difference in pay rates between different merchants.

Accepting Credit Cards: Pros & Cons

The convenience vested in credit card usage is simply limited to their general-purpose usage, and for specialized business operations, other options produce much better end results.

Here are some advantages of accepting credit card payments:

Customer convenience

Credit cards are indisputably a convenient method for customers to pay. It is also preferred option for customers as it typically comes with cash rebates, mileage or other rewards.

Business legitimacy

Customers typically have a significant level of trust in the credit card brands that they carry. When businesses accept customers’ preferred card, the legitimacy and reputation from the credit card association is indirectly passed on to the business. It also improves the image of the business, as it is seen to have sufficient scale and viability to accept credit card payments.

Boost sales and cash flow

Customers tend to spend more on credit, due to the impulse to purchase when they do not see the physical outflow of cash. The ease of tapping a credit card also makes it easy to pay, as opposed to withdrawing cash from an ATM. These factors help to boost sales and cash flow for the business.

But even though credit cards are touted as the ideal solution for most business processes, they can be one of the most expensive ways to manage payments. Credit cards include comprehensive payment fees that can increase multifold in currency transfer situations. For businesses handling their payments in foreign currencies, the currency conversion changes could be as high as 5%. This surcharge can add a overhead costs to the business management process and limits the viability of credit cards as feasible payment management options.

Here are a few disadvantages of accepting credit card payments:

Additional exchange fee

Exchange fees make up the majority of the costs being applicable to consumers. Even though customers are under the assumption that they are being offered fair forex conversation rates, in reality, merchant providers make up the majority of their profits through the exchange fees. The additional exchange fees can add an additional 5% to small businesses. For companies working on small profit margins, this conversion fee can wipe out the majority of their profits.

Applicable card limits

Credit cards are often limited by their upper payment fees. These applicable card limits can be a limiting factor in impacting the business prospects of small and medium companies. These applicable card limits are entirely dependent on the credit score and financial situation of the business. While conventional businesses can have extended lines of credit, credit cards can be limited with high overdraft fees, which can exert an additional financial toll on the company.

For businesses that are looking to streamline their payment processing and handling, it is important to look towards alternative payment options that can help in the reduction of the processing fee. Considering alternatives to accepting physical credit cards at POS such as e-commerce or QR code-based payments instead, could potentially be a viable way to save thousands of dollars in processing fees. Companies like Aleta Planet can provide a broad range of payment options that can be a great alternative to conventional physical credit card payments.

Merchant Fees in Singapore 

In the context of Singapore, the biggest stakeholders in the market are Visa and Mastercard. However, UnionPay has also grown in popularity, with many Chinese citizens working in Singapore. These payment options are globally accepted due to their seamless integration with conventional payment methods. These methods are commonly used by Singaporean consumers because of their global acceptance and compatibility.




3.9% + SGD$0.50 (domestic sales) and 4.4% + Fixed Fee* (international sales)


3.4% + SGD $0.50 (credit and debit cards), 2.2% + SGD$0.35 (digital wallets such as Alipay and WeChat Pay) and 3.3% (GrabPay, Apple Pay and Google Pay)

DBS PayLah!

3.00% (credit and debit cards) and 2% to 4% (for instalment plans)


3.4% + SGD$0.50 (eNets Credit), 3.5% or SGD$1.50 (eNets IDD) and 0.8% (Nets QR Online)

The available merchant platforms provide users with the ability to convenient chose the most feasible options based on their business requirements.

Payment Providers for Merchants in Singapore 

For eCommerce businesses in Singapore, there is a wide range of payment provision options that allow them to manage the transfer of payments. Digital payment providers allow payment providers to have payment authentication and authorization for eCommerce websites. Singaporean providers are centered around payment provisions that utilize a front-end management structure to handle customer information and payment processing. These payment providers provide broad-based payment support with simplified processing management and currency conversion.

Here’s the list of the leading payment providers in Singapore.


PayPal is considered to be the largest payment provider across the globe due to its proven history of secure service and working structure. The platform is trusted across Singapore due to its fast transaction structure and security. The integration of credit and debit cards as well as leading American sources makes it a lucrative option. The payment handling aspects of the platform include supply chain management and simple payouts. The platform also provides comprehensive risk management allocations with the inclusion of two-factor authentication and streamlined dispute resolution services integrated within the platform.


Stripe offers broad payment support with compatibility for leading payment provision services and solutions, including Android Pay and Apple Pay. The solution offers enhanced developer tools and streamlines digital management with advanced analytics to provide a comprehensive analysis of payment types and payment reconciliation solutions. The platform also accepts payments from all leading payment options.

DBS PayLah!

DBS PayLah! Offers a comprehensive payment management solution with integrated support for leading payment channels and services. The service is considered to be amongst the fastest growing domestic providers due to its streamlined support and localized structure. The connectivity to the DBS account structure makes it a lucrative option.


eNets is considering to be among the quintessential Singaporean payment management platforms due to its integrated payment management. The solution provides simplified payment handling through the integration of digital channels. The platform provides simplified Direct Debit-based eCommerce support with 3D security for the most commonly used digital platforms and services.

Looking for a Viable Payment Option? Explore Further with Aleta Planet

Merchant Fees in Singapore can be a significant element of cost for business owners. Being aware of the different providers and elements can help businesses improve their workflow efficiency and maximize their profit by minimizing unnecessary fees and opting for a viable partner that helps them reduce their overhead costs.

One alternative payment gateway provider is Aleta Planet. In addition to being WeChat Pay and PayNow enabled, Aleta Planet is a certified principal member of UnionPay and JCB, and a global acquirer for Discover and Diners Club. Getting onboard with Aleta Planet can help you to have optimized payment management.

Aleta Planet’s AP-1 Business Account is also a convenient digital account for merchants to receive sales proceeds from Aleta Planet within T+1 (for SGD) or T+3 (for USD), deposit funds, pay and remit to China.

If you’re dealing with suppliers and partners based in China, AP-1 Business also helps you through simpler payments into China. It is a faster alternative to conventional bank transfers, which can take several days due to its complexity and multiple fees. The business account taps on the UnionPay network to help businesses unlock the best FX rates for simpler transaction management.

Hence going with a payment gateway provider like Aleta Planet can provide a ton of benefits that are designed to simplify the sales collection process and speed up the settlement time to smoothen cash flow for merchants, while keeping merchant fees affordable.

Explore how you can broaden your payment acceptance for customers with Aleta Planet or get started with AP-1 Business today.

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