Direct digital payments are expected to overtake cash transactions in the Asia-Pacific region by 2028, according to research by Euromonitor International.
The Asia-Pacific region recorded the highest digital payment transaction value in 2023, reaching USD 29.63 trillion, accounting for 52% of the global total.
Credit and debit cards are expected to generate the majority of new sales during the period 2023-2028, as cards are the most popular payment method in the region.
Credit cards are projected to register a slightly higher compound annual growth rate (CAGR) than electronic direct transactions.
Furthermore, personal electronic direct payments are expected to overtake personal cash transactions by 2028.
Card payments surge across Asia Pacific
Among card payments, debit cards remain the most popular transaction type in China, due to the impact of state-backed comprehensive financial programs to encourage bank account opening in rural areas.
India recorded the highest growth in credit card payment transactions in Asia Pacific. The transition to the Unified Payments Interface (UPI) provides consumers with faster, more convenient, and more secure transactions compared to wallets, contributing to the exponential growth of personal electronic transactions.
As a result, cash transactions will continue to lose market share. Although debit cards dominate in volume, credit cards are expected to surpass debit cards in transaction value by 2028.
In East Asia, Japan has the second-highest growth in personal card payment transactions. Initiatives toward “cashless vision”. Debit card payments grew at a CAGR of 19% from 2018 to 2023.
Paper transactions are rapidly decreasing in Japan and South Korea due to the digital shift to electronic and card payments.
During this period, Japan experienced the second-largest decline in retail value after China. South Korea had the highest decline in paper transactions from 2018 to 2023, registering -39%, while mobile proximity payments increased by 29%.
Digital wallets grow in popularity
While paper transactions remain important in some countries, the convenience of digital wallets continues to drive adoption in the region.
This trend is particularly evident in emerging countries such as Thailand, Indonesia, China, and India. Nearly 70% of Chinese consumers use WeChat Pay every day, and more than half of Indian consumers use WeChat Pay. PhonePe every day.
fast growing market
Indonesia will see the fastest growth in personal payment transactions with a CAGR of 67% from 2018 to 2023, driven by smartphone penetration, increased use of digital wallets, mobile banking, and the Quick Response Code Indonesia Standard (QRIS) developed for Indonesia. is growing to. Cashless payment.
Developed markets still have potential for growth. In Singapore and Hong Kong, the CAGR of mobile proximity payments was 31% and 19%, respectively, during the period 2018-2023.
david chan
David Chan, Insights Manager for Payments and Lending at Euromonitor International, said:
“In Asia Pacific, embedded financial partnerships between established financial institutions and fintechs are accelerating the development of digital identity and remote authentication.
Additionally, advanced credit decisions and government initiatives such as payment standardization (fast payments and QR) and subsidies have paved the way for greater financial inclusion, payment diversification, and the growth of cashless payments. . ”
Featured image credit: Edited from freepic
