In Singapore, retailers are embracing artificial intelligence (AI) at a rapid pace, with the vast majority of merchants incorporating the technology in some form, according to a new survey by Adyen.
However, consumers remain cautious, particularly regarding AI agents, due to concerns stemming from cybersecurity risks and fraud.
The study, which polled more than 1,000 consumers and 300 senior-level retail employees in Singapore between March and April 2026, found that nearly all of the merchants polled (99%) utilized AI in some capacity, highlighting the widespread adoption of the technology among Singaporean businesses.
While AI has become an integral part of Singaporean retail, consumers expressed more apprehension towards the technology despite growing use. Notably, 72% of consumers reported using AI-assisted shopping through platforms and chatbots like Gemini and ChatGPT, but 58% hesitated to let agentic AI transact on their behalf, reflecting significant skepticism towards autonomous AI agents.
A lack of trust
Negative past experiences explain some of this skepticism. Notably, 38% of AI-assisted shoppers said they have encountered phishing messages and 15% have faced scams impersonating a retailer.
E-commerce scams are in fact one of the most prevalent types of scams in Singapore. In 2021, the Ministry of Home Affairs reported over 2,700 cases, resulting in substantial financial losses amounting to approximately SGD 5.8 million (US$4.6 million).
Since then, e-commerce scams have continued to rise, growing 19.3% from 3,240 cases in H1 2025 to 3,865 in H1 2026, and becoming the top scam type in the city state, according to the Singapore Police Force’s (SPF) latest Mid-Year Scam and Cybercrime Brief. Losses from these scams also increased 18.9% to about SGD 8.3 million (US$6.51 million), compared with SGD 7 million (US$5.5 million) a year earlier.
Technical challenges hinder deeper merchant adoption
The Adyen study also identified several obstacles hindering the broader and more profound integration of AI within Singaporean retailers’ operations. Data-related challenges were particularly prominent, with only 23% of omnichannel retailers having a unified data layer capable of feeding real-time AI models last year. Consequently, the remaining 77% relied on partial and fragmented data, leading to inconsistencies across channels, poor shopper experience and missed opportunities.
Notably, businesses are overwhelmed by the sheer volume of data they encounter, leading consumer intelligence to emerge as the most frequently cited business challenge, identified by 31% of respondents. Among large-scale merchants, 24% considered it their primary hurdle.
Cybersecurity is another key challenge. The survey revealed that 84% of merchants had experienced payment fraud in the previous year. Furthermore, 94% faced payment performance issues, leading to abandoned checkouts at 30% and reduced customer trust at 27%.
A digitally-savvy population
Singapore, a hyper-connected society, boasts a remarkable mobile penetration rate of 166%, translating to about 9.8 million active connections for 6.8 million people, according to DataReportal.
In e-commerce and retail, consumers are embracing technologies to enjoy seamless user experiences and streamlined checkout processes. Notably, 63% of consumers are leveraging self-checkout, 37% utilize brand apps for easy check-out, and 26% pay via using mobile terminals while standing in queue to speed up the transaction process.
Digital tools are also playing a critical role in product discovery and consumer engagement. A significant 21% of consumers use AI when shopping, with 72% of AI-assisted shoppers stating that the technology helps them cut through the noise. Notably, 68% said AI is the fastest at providing ideas, and 66% agree it helps them uncover unique brands and experiences, encouraging them to use AI again the next time.
Agentic AI in Singapore
At the same time, businesses in Singapore are rapidly embracing agentic AI. According to a separate 2026 study by ServiceNow, AI agent adoption among Singapore enterprises reached 51% in 2026, doubling from 22% in 2025.
The survey, which surveyed 4,500 senior leaders across 19 countries including 200 in Singapore, found that 10% of Singaporean businesses are already using agentic AI to create autonomous, end-to-end workflows. In particular, 33% are using agentic AI to assist individual employees with day-to-day tasks, and 10% have redesigned processes where AI completes multi-step business tasks end-to-end.
This surge in agentic AI adoption in Singapore coincides with a significant increase in Singapore’s AI investment trajectory. In 2026, Singapore organizations directed 15.4% of their IT budgets to AI, with spending growing at 108% year-on-year.
Featured image: Edited by Fintech News Singapore, based on image by utaem2022 and bugphai via Magnific
