APAC’s Cashless Society: The Future of Digital Payments
APAC leapfrogged the West and is showing us how payments are done!
The Asia Pacific region accounted for nearly two-thirds of the global digital wallet spending at a combined $9.8 trillion and has digital wallet penetration rates of 70% compared to 50% globally.
Deloitte boldly proclaims, “The APAC region is spearheading the world’s shift to a cashless society.”
As the author of a book and a newsletter titled “Cashless,” how could I disagree?
The digital payment revolution that started in China caught on like wildfire throughout Asia, and its transformation of payment, e-commerce, finance, and banking has really only just begun. There’s a lot more to follow.
👉TAKEAWAYS: THE FOUR BIG TRENDS
Trend One: The digital payment evolution: the rise of the cashless economy The Asia Pacific region is spearheading the world’s shift to a cashless society The popularity of digital wallets is attracting attention from major players across numerous industries
Trend Two: Private and public sector collaboration is key to greater payment interoperability Upgrades and cooperation in digital payment infrastructure enable payment interoperability and regional integration Public-private collaboration in evolving digital payment infrastructure
Trend Three: Digital wallets go beyond payments and enable omnichannel commerce Digital wallets go beyond payments and now offer a suite of services Super apps contribute to streamlining the shopping journey
Trend Four: Fintech eyes inclusive and sustainable growth Digital payments have become an anchor for financial Inclusion and a pathway to growth Opening new possibilities for MSMEs’ sustainability transitions Digital wallets as one-stop platforms to promote carbon reduction
Look at how Visa and Mastercard lost the APAC market! They must shed tears looking at this chart!
👊STRAIGHT TALK👊
Deloitte did a great job pointing out how digital wallets are disrupting payments, but it did a terrible job explaining who is being disrupted!
First on the list are credit cards! The graphs for card use throughout APAC show that credit cards are making a strong stand only in the developed nations of South Korea, Japan, Singapore, and Hong Kong—four of eleven countries in the survey.
This means that the vast majority of APAC’s population (India and China) has been lost to credit cards. I am sure someone in the card business who saw these charts must be weeping.
Cards won’t die. Take China as an example. They are issuing lots of cards, but their usage is way down, and few use them for credit when cheaper superapp embedded options exist.
Banks are also being disrupted. Digital banks and financial services are bringing inclusion that traditional banks never could.
This is fundamentally good for society, but local incumbent banks have lost an entire generation of aspiring affluent clients who won’t miss them.
APAC is leapfrogging the West in payments and leading the world’s “Cashless” revolution, including CBDCs.
If you think this doesn’t matter, or will stay in APAC, you couldn’t be more wrong.
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