Convenience has been a driving force behind the increasing adoption of digital wallets in countries across the Asia Pacific region, according to new research by market research firm Euromonitor International.
Digital wallets have gained the most popularity in big emerging countries in the Asia Pacific region including Thailand, Indonesia and India, recording a double-digit CAGR from 2018 to 2023. Almost 70 per cent of consumers in China use WeChat Pay daily and over half of Indian consumers use PhonePe every day.
Unsurprisingly, China dominates digital wallet adoption in the Asia Pacific region, with consumers increasingly using digital wallets over cash.
Euromonitor expects the collaboration of payment ecosystems between Chinese digital wallet giants WeChat Pay and Alipay to foreign-issued digital wallets to help attract inbound travel and promote the integration of different payment types.
David Zhang, insights manager for payments and lending at Euromonitor, commented: “In Asia Pacific, embedded finance partnerships between incumbent financial organisations and fintechs, have accelerated the development of digital IDs and remote verifications.
“Additionally, advanced credit decisioning complemented with alternative data and governments’ initiatives including payment standardisations (fast payment and QR) and subsidies have paved way for greater financial inclusion, payment diversification and cashless payment growth.”
Going cashless across Asia Pacific
Countries such as Singapore and Hong Kong saw a CAGR of 31 per cent and 19 per cent respectively for mobile proximity payments, from 2018 through 2023.
Meanwhile, in Indonesia, electronic direct transactions continue to be the fastest-growing mode of personal payment transactions with a CAGR of 67 per cent between 2018 and 2023, driven by the popularity of smartphones, increasing usage of digital wallets, mobile banking, and Quick Response Code Indonesia Standard (QRIS), developed for cashless payments.
However, cash payment methods continue to dominate personal payment transactions in Indonesia, with traditional retail outlets still predominantly accepting cash.
While both debit and credit cards are popular in China, debit cards remain the most popular transaction type for personal payment in the country, with its popularity boosted by its state-backed inclusive finance programme to encourage bank account openings in rural areas, explains Euromonitor.
In India, credit card payment transactions recorded a CAGR of 28.3 per cent from 2018-2023, the highest in APAC growth of $128billion in 2018-2023. Credit cards will outperform debit cards in terms of transaction value in the forecast period by 2028, while cards in circulation remain dominated by debit cards.
Euromonitor International explained that cash transactions will continue to lose their share as Indian local consumers are drawn to the ease, speed and security when paying for goods and services with cards, especially when using contactless smart cards.
