As governments issue movement restrictions to help curb COVID-19, businesses accelerated their digital transformation which includes, among others, digital payments. According to Global Data, a data analytics and consulting company, the pandemic has fast-tracked the transition to digital payments across the Asia-Pacific (APAC).
According to Global Data revised forecasts, the total card payments in APAC market are expected to grow by 6.5% to reach $20.3 trillion in 2020. This is expected to rise further to $27.4 trillion by 2023.
Even cash-intensive countries in the region such as India, Japan, Taiwan, the Philippines, Malaysia, Indonesia, Vietnam, and Cambodia are witnessing similar trends, with a rise in card payments.
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“While most Asian markets are traditionally cash-dominated, there has been a gradual rise in digital payments in the past few years due to constant push by the governments, banks, and payments companies,” said Kartik Challa, analyst, Banking and Payments, GlobalData. “The current COVID-19 pandemic has further accentuated the importance of digital payments among consumers.”
According to Global Data, the pandemic is aiding card payments growth, mainly driven by a rise in online purchases and an increase in preference for contactless payments over cash for in-store purchases. According to the South Korean Ministry of Trade, Industry and Energy, online retailers’ sales in South Korea registered year-on-year growth of 34.3% in March 2020, the majority of the payments were made via payment cards.
While there is high adoption of contactless payments in countries such as Australia and Singapore, the current crisis has given a push to contactless payments in other markets where it was not very popular.
In addition to payment cards, the use of mobile payment is expected to become more widespread. QR-based merchant acceptance solutions like Singapore-based SGQR and Malaysia-based DuitNow QR will see a surge in use as they are cheaper and convenient.