“Our analysis focuses on impact on card fees if 40-70% of expenditure in Singapore shifts from cash to cashless payments,” says Maybank analyst Ng Li Hiang. “Using some broad assumptions, we estimate this could raise banks’ FY17-19 profits by 3-9%.”
SINGAPORE (Sept 18): Even as Singapore gears up on its cashless payments ambitions, Maybank Kim Eng Research says higher adoption of e-payments could raise the banks’ earnings in FY17-19E by as much as 9%.
According to Maybank, the bulk of banks’ cards fees come from merchant discount rates (MDR) and net interchange fees. Assuming that some 70-90% of banks’ card fees in Singapore are related to such fees, this translates to Singapore banks earning between $77 million and $388 million in fees in FY16.
