Digital payments accelerated considerably in the Asia-Pacific region in 2020 amid the COVID-19 health crisis.
Among other contributors to that growth were the increased smartphone penetration, Internet access and high digital adoption rate. Asia-Pacific dominated in cashless transactions in 2020 and was forecasted to remain the global leader over the next 5 years as well, increasing at a CAGR of 16% from 2020 to 2025.
China dominated the region and the world in mobile payments in 2020, with transactions valued at more than two trillion US dollars and adoption by 80% of all smartphone users.
Other countries in the region where the digital payments market saw significant growth were Malaysia with an increase in electronic money transactions of more than 60% from 2019 to 2020 and Indonesia with a growth of more than 40% in E-money operations.
Consumers adapted to the rapidly changing environment amid the pandemic with a major shift towards online and cashless payments.
The common reasons for doing so were to avoid handling of cash, the ability to earn points, the convenience, speed and an easier checkout process.
Popularity of alternative payment methods varied among countries of the region. The most common payment methods during the health crisis were physical or contactless cards, digital wallets, while in some nations, cash remained the leading form of payment in 2020.
Mobile payments witnessed a notable acceleration in the region over the past year. In South Korea, mobile wallet payments increased 46% from 2019 to 2020, in China, third-party mobile payments grew 18.3% from Q3 to Q4 2020, and in India, the transaction value of mobile wallets was expected to leap by 81% from 2020 to 2021. Leading mobile payment service providers in the region in 2020 included iD and Suica Mobile in Japan, Naver Pay and Kakao Pay in South Korea, and Alipay and Tenpay in China.
