In Southeast Asia, e-wallets are rapidly emerging as the most popular payment method, and this trend is particularly evident in countries like Indonesia and the Philippines, where large portions of the population still lack access to traditional banking services. It is a country where the government is promoting the improvement of banking services. A new study by Visa reveals the current state of cashless transaction usage.
The annual Visa Consumer Payment Attitudes Survey was conducted in collaboration with CLEAR in Q4 2023 among 6,550 consumers in Singapore, Malaysia, Indonesia, Vietnam, Philippines, and Thailand. reveal E-wallet adoption is rapidly increasing across the region, with 79% of respondents saying they use this payment method, with cash (77%), debit and credit cards (70%), more than Internet banking (70%).
Indonesia and the Philippines lead in the use of e-wallets, with 92% and 87% of respondents using the payment method, particularly QR payments and mobile payment apps, respectively.
Fintech innovations and government initiatives drive e-wallet growth in Indonesia
Advances in financial and technological infrastructure, a large and dynamic economy, and significant private sector investment are driving rapid adoption of e-wallets in Indonesia.
The country is also a hotspot for fintech investment, boasting a thriving fintech ecosystem with major players such as GoPay, OVO, and Dana, consistently ranking among the top recipients of venture capital (VC) and private equity funding in Southeast Asia. Ranked.
The Indonesian government has also played an important role in promoting digital payments. Initiatives such as QRIS (Quick Response Code Indonesia Standard), a national standard for QR code payments launched in 2019, have enabled standardization, improved convenience for businesses and consumers, and improved collaboration between the government and FinTech. By working with tech companies, we have helped strengthen tangible financial inclusion. Rules.
E-wallets gain momentum in the Philippines amid financial inclusion efforts
E-wallet adoption is rapidly increasing in the Philippines due to the large unbanked population and the government’s continued efforts to improve financial access.
of Digital Payments Transformation Roadmap (DPTR)was introduced in 2020 and aims to convert at least 50% of all retail payment transactions into digital format by 2023. The goal is surpassedLast year, the share of digital payment transactions in the Philippines soared to 52.8%.
The increase in the use of e-wallets is consistent with other improvements in financial access observed in the Philippines in recent years. According to According to the 2021 Financial Inclusion Survey by Bank of Pilipinas (BSP), the formal account ownership rate was 56% in 2021, a notable increase from 29% in 2019, 23% in 2017, and 17% in 2015 .
Much of that growth has been driven by the surge in the adoption of e-money accounts, highlighting the pivotal role digital wallets play in expanding access to financial services.
In 2021, electronic money accounts surpassed bank accounts to become the most commonly held financial accounts in the country. From 2019 to 2021, the penetration rate of e-money accounts skyrocketed, increasing more than four times from 8% to 36%. In contrast, traditional bank accounts grew more slowly, rising from 12% to 23% over the same period.
Cash and cards still play an important role in Southeast Asia’s payments landscape
Despite the increasing adoption of e-wallets in Southeast Asia, cash and payment cards remain important elements of the payment environment, and both are widely preferred among consumers.
Research shows that on average, cards (34%) are the preferred payment method for Southeast Asian consumers, ahead of mobile wallets (26%) and cash (26%).
Card payments are particularly popular in more mature markets such as Singapore and Malaysia (91%), where they maintain a deeper foothold than other new payment methods. It is also preferred by baby boomers (born between 1946 and 1964) and wealthy spendthrifts, who tend to have more disposable income than younger generations.
Additionally, card payments dominate in terms of frequency, with 34% of consumers using their cards multiple times a week, compared to 26% for mobile wallets.
Embedded finance gains momentum
Embedded finance, which integrates financial services with non-financial services, is emerging as one of the top fintech trends emerging in Southeast Asia.
Embedded payments are already widespread in the region, used by almost half of consumers surveyed, with particularly high adoption in Malaysia (58%) and Indonesia (60%).
However, interest is high across the region, with 59% of non-users in Southeast Asia expressing interest in trying this payment method in the future. Convenience (56%) and speed (46%) are the main factors of interest.
In addition to payments, embedded lending is also growing in Southeast Asia, with the Philippines (54%) and Indonesia (53%) emerging as the top markets by application. Users cited flexibility (38%) and convenience of applying for loans and loans (36%) as the main reasons for their use.
Finally, embedded insurance is used by 37% of consumers across Southeast Asia, with the most popular insurance types being travel insurance (63%), mobile phone insurance (54%), and e-commerce insurance (45%). ) follows. These solutions are mainly adopted in Vietnam (47%), Malaysia (45%), Indonesia and Thailand (43%), and are driven by convenient and relevant coverage (55%) and less difficult claims. Driven by consumer demand for procedures (45%). .
Featured image credit: Edited from freepic
