Contactless Payments Industry in APAC: A Booming Market during COVID-19

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The pandemic has indeed caused a lot of economic problems for various countries in the APAC region. However, it has also reiterated the importance of technological innovations such as digital payments. In a way, it has paved the way for the industry to flourish at a faster rate. Recent reports from Rapyd reveals that digital wallets and online bank transfers have become the most preferred payment option of APAC users, except for consumers from Japan and Taiwan. In both countries, they still prefer cash, cards, and card-powered phone payment.

Undoubtedly, the digital payments industry has come a long way since the introduction of the electronic fund transfer by Western Union back in the 1870s. The market has steadily grown over the years. It’s use has become so widespread that around 64 million households now settle one of their bills through digital means and digital payments exceed two-thirds of the world’s non-cash payment channels.‘

Current market trends in APAC digital payments

The APAC electronic payments market is far more prominent compared to that of North America and Europe’s market. In fact, a study conducted by Mastercard in 2017 showed that Asia-Pacific leads the world when it comes to using digital wallets

In 2019, the region’s digital payment industry generated around $1.9 trillion in revenue, with China contributing two-thirds of the total amount [3]

Besides China, Singapore, Australia, Malaysia, and New Zealand are also helping the sector reach new heights. Other countries such as Thailand and the Philippines are slightly behind in terms of growth and digital infrastructure. To help you get a full grasp of the market, here are some key data and statistics:

  • Around 6 percent and 67 percent say that they prefer using cashless payment in Singapore and Australia.[1]
  • In Malaysia, 48 percent of the population make use of contactless payment options. Meanwhile, Thailand and the Philippines have a slightly lower market penetration rate compared to other APAC countries with only 33 percent and 38 percent users, respectively.[1] 
  • Southeast Asia also leads the digital payment revolution thanks to consumers’ preference in using e-wallets for their purchases from hawkers, transportation, food deliveries, and ride-sharing apps.[2] 
  • Japan, despite having advanced tech, still prefers cash. However, recent events have pushed for banks to build infrastructure for cashless payments.
  • In China, digital payments have increased through the years, thanks to consumer’s growing preference over online shopping and transactions. China is dubbed as the fastest digital adopter in APAC.
  • Contactless payments are also getting more and more traction in New Zealand. However, the market struggles because of the costly merchant fees that banks charge. 
  • By 2023, India aims to contribute 2.2 percent or roughly $12.4 trillion to the global digital payment sector. Currently, the Indian market has a solid position in the industry because of regulated merchant fees and the government’s support.  
  • In South Korea, Samsung Pay continues to dominate its mobile payment market with over 40 trillion in revenue last 2019.

How is it affected by COVID?

Initially, it took time for the market to gain momentum as consumers in the region either prefer to use cash or card payments. Fast forward to 2020, a large fraction of consumers have shifted to online or digital payments to minimise contact and the spread of the highly contagious coronavirus. Shift to online shopping, even for essential commodities, has also contributed to the industry’s rapid growth. 

According to Mastercard, the global use of digital payments rose by 40 percent. In Asia, it has grown by 2.5 times compared to pre-COVID times. The best part is that 75 percent of Asia-Pacific respondents say they would continue to use digital payments events after the outbreak.[1] 

Surely, aspiring digital payments professionals can certainly expect to see more growth in digital payments hiring in APAC as the industry continues to prosper and evolve.

APAC digital payment companies

Fintech investment in Asia continues to pour in, fueling the competition between various digital payment companies. It also has motivated startups and new companies to rise to the occasion and present innovations that may further change the landscape of the market.

Currently, the region is home to plenty of growing digital payment companies. Some notable examples include:

1. Alipay – Alipay is the top online payment channel in China, and it’s a must-have for businesses in the country that want to tap into the Chinese shopping market. The company has more than 100 million transactions per day. 

2. GrabPay – GrabPay is an electronic wallet made popular in Singapore and has expanded its operations in Malaysia, Philippines, Indonesia, and Vietnam. It’s commonly used to pay for taxi rides, food deliveries, and in-store purchases. Users can also use the platform to transfer funds.

3. DBS PaylahDBS Paylah is Singapore’s second-leading mobile payment platform. It’s a proprietary phone application of DBS, a Singapore-based banking and financial service provider.

4. PayTM The Indian eCommerce online payment platform was founded in 2010 by Vijay Shekhar Sharma. The platform can be used to book transportation tickets, pay for bills, and purchase all kinds of goodies.

5. PayDollar – PayDollar was founded back in 2000 as a world-class online and mobile payment platform. The company’s headquarters is currently located in Hong Kong and has 15 offices all over the APAC region.

6. Rakuten PayRakuten Pay is an online payment offered by the Japanese eCommerce company, Rakuten. The company has over 116 million members who enjoy making safe and fast payments when they shop on the platform.

7. Tree Pay – Tree Pay is Thailand’s leading digital payment service provider. It’s a joint partnership between three companies, CAT Telecom, NHN KCP, and SK Telecom. 

8. Oceanpayment – Oceanpayment, A China-based global payment service provider, offers fast and safe payment solutions to businesses. They cater to both local and international customers. 

Working in the digital payment industry

One thing is for sure – contactless payment is here to stay & it’s only going to get bigger and better as the world embraces digitisation. While some APAC countries are still trying to catch up due to the lack of talents, funding support, and digital infrastructure, that won’t stop the region from leading the global market. Which is why it’s no surprise that venture capitalists are projected to continue to showing interest in the digital payment sector of the Asia Pacific.

Singapore is further helping in boosting the growth of the Fintech sector by launching the NUS-FinTechSG Programme to nurture the next generation of fintech talents. The Programme comprises a 2 month intensive full-time course on the fundamentals of financial services technology and business, focusing on the areas of front and back-end development, cloud computing, software development and IT operations, as well as database and security, gives them an advantage in the job market. Such new initiatives support in boosting talent & employment in the Fintech space. [4]

As companies are getting used to the new normal and bouncing back to business operations post COVID-19 lockdown, there will be more openings for aspiring candidates. Want to stay on top of the latest updates in the fintech payments market? Subscribe to our newsletter or check out our new job openings in digital payments here in APAC

Anchal Murawala is a Senior Associate at Datasearch Consulting, a leading executive recruitment firm specialising in the Financial Technology & Data sectors.

You can download their FREE comprehensive guide on “The Complete Guide to Hiring Fintech & Data Talent – 5 Proven Steps to Secure your Ideal Fintech or Data Role”. Alternatively, you can view the Datasearch Consulting website or contact them directly on info@datasearchconsulting.com for a more detailed discussion.

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