NUS Business School study: Introduction of PayLah! boosts mobile wallet usage; may foster business growth for small, entrepreneurial firms

A new study by the National University of Singapore (NUS) Business School has found that the introduction of PayLah!, a smartphone-based Quick Response (QR) code payment technology in Singapore, has doubled the use of mobile payments.

According to the study, consumers use mobile wallets mostly for small-amount transactions. The weekly count of small-amount transactions of less than S$100 increased by 114 per cent, while larger transactions (sums greater than S$100) increased by 88 per cent.

The study was co-authored by Low Tuck Kwong Distinguished Professor Sumit Agarwal, Dean’s Chair Associate Professor Qian Wenlan, and Stephen Riady Distinguished Professor Bernard Yeung from the Finance Department at NUS Business School, together with Assistant Professor Zou Xin from the Hong Kong Baptist University. 

With the rapid development of smartphone and financial technology, mobile payment has been growing fast in recent years. According to Statista[1], the transaction value of mobile point of sale (POS) payments in Singapore more than doubled from US$218 million in 2016 to US$470 million by the end of 2017.


Using an anonymised dataset containing a variety of bank activities for 250,000 consumers from a leading local bank, the study analysed local transactions from randomly chosen customers, including transaction amounts and time, as well as the name of the merchant. 

The data spanned a 24-month period from January 2016 to December 2017, including the timeframe when PayLah! came online on 13 April 2017.

These consumers transacted with 45,469 unique merchants during the two-year period.


The study found that mobile wallet usage immediately increased upon the introduction of PayLah!, with small transactions (under S$100) accounting for the greatest proportion of the increased usage. Small merchants receiving small-sized payments experienced a significant increase in monthly card sales amount by 7 per cent after the adoption of the QR code technology.

Credit and debit card sales for small merchants increased significantly compared to large merchants after the QR code was implemented. Relative to the first two months in 2017 prior to the launch of the payment technology, small merchants saw an average increase of 3.4 per cent per month in the value of credit and debit card sales during the 9-month period after the technology was introduced. 

New entrepreneurs who have just started their business benefit more from the low-cost and convenience offered by the new technology. Newly established small stores increased monthly card sales amount by 11 percent, compared with 2.1 per cent growth among the more established small merchants.

The findings showed that mobile payments, specifically after the introduction of the QR code, helped merchants to grow sales. The convenience and efficiency of the payment technology promoted sales growth primarily for new businesses by facilitating customer acquisition. 

As for the types of goods sold, the spill-over effect from improved payment convenience of mobile wallets was seen across all categories, including discretionary items such as durable goods, apparel and entertainment. Among small merchants, dining providers such as single non-chain restaurants saw the largest spill-over effect in the form of increased retail traffic due to improved payment convenience, with a 12.6 per cent increase in total card sales

“The development of mobile payments plays a critical role in Singapore’s goal of becoming a cashless society,” said Professor Sumit Agarwal. “The findings also provide important input for discussions about fintech and digitisation by offering new insights on the real economic effect of improved payment convenience and efficiency.”