Asia’s payments sector would be well positioned to exceed US$1 trillion in annual revenue by 2022 or 2023. Fast-forward two years later, and it looks like US$1 trillion may be on the lower side of expectations for digital payments in Asia. The accelerated migration online across all services was also reflected in the digital financial services. In the B2C payments space, mobile-first customers in emerging Asia Pacific (APAC) countries are leapfrogging those in more mature markets, driven by e-commerce and fueling multiple fintech unicorns such as India’s Paytm, Singapore’s NIUM, and the Philippines’ Mynt.
It’s now a familiar sight for your roadside snack stall to accept e-wallet payments via QR codes, but not credit cards. With Covid-19 continuing to fuel social distancing, cash is on the downswing. Market research firm Kantar found that the average number of cash transactions dropped by 11% during the pandemic. In response to the rise in digital payments, the firm has increased its 2025 global online transaction value estimates from US$$1 trillion to US$$1.2 trillion. With rates in 2020 reaching previously forecasted levels for 2025, Kantar believes Southeast Asia has achieved five years of consumer adoption in a single year. While innovation has continued apace in the B2C space, cross-border payments have emerged as a niche for new challengers – often marketplaces – who cut down processing times, reduce costs, and cut through red tape. With the proliferation of APIs (application programming interfaces) and embedded finance, new marketplaces can quickly offer a multitude of payment options on their apps.