Alternative payments have gained significant prominence among online shoppers in the Asia-Pacific (APAC) region with payment solutions such as mobile and digital wallets displacing traditional payment methods like cash and cards.
E-commerce payments in APAC (covering 16 countries) are estimated to increase by 16.7 percent in 2021 to reach $2.8 trillion, due to an accelerated shift towards online shopping among consumers, according to GlobalData’s E-Commerce Analytics.
The value is anticipated to rise further at a CAGR of 12 percent to reach $4.3 trillion in 2025.
The APAC e-commerce market has been growing at a robust pace over the last few years supported by rising Internet and smartphone penetration, growing middle-class population and tech-savvy millennials.
“The adoption of alternative payments in APAC has occurred well ahead of that in the West and now they are gradually replacing cash and cards,” said Ravi Sharma, Lead Banking and Payment Analyst, GlobalData.
The rising smartphone penetration coupled with large unbanked population has helped in the growth of alternative payments in the region, experts believe.
Reasons For Alternative Payments' Adoption
Convenience, speed and security are cited as the most important factors for using alternative payments for online purchases, the survey found.
Rewards and other pricing benefits associated with these solutions also entice shoppers to use these payment solutions.
Sharma stated, “The usage of alternative payments is poised for major growth in the next few years in APAC, disrupting the overall consumer payment space in the region with the gradual decline in cash usage. Increasing consumer demand for online shopping amid the pandemic, rise in smartphone penetration, and growing acceptance of these tools will further drive their usage in coming years.”