Cash is still the preferred mode of payment in South East Asia, PayPal study reveals
As one of the last development frontiers in the world, the South East Asian digital payment market is closely watched by industry experts. Recently, PayPal commissioned a study to assess attitudes towards new payment methods and to obtain insights into the state of financial health and satisfaction in Asia. The report, titled ‘Digital Payments: Thinking beyond Transactions’
, assessed the attitudes that people have towards new payment methods and revealed the vast untapped potential for digital payment solutions in the region.
The report found that while the average percentage of people who preferred cash was 57%, this number varied widely in the countries surveyed. In Indonesia and Philippines, 73% and 75% of respondents respectively stated that they preferred to use cash. In Hong Kong and Singapore, the respective numbers were lower at 44% and 43%. The ubiquity of payment solutions like WeChat Pay and Alipay in China meant that only 25% of Chinese respondents indicated that they preferred cash. This is yet another clear indicator of the influence that WeChat Pay and Alipay have over the Chinese market.
It was also revealed that the preference for cash was not due to obliviousness to the presence of digital payment modes. Rather, Asians are familiar with these new payment modes, with almost one in two consumers aware of a digital payment option. The key for digital payments providers to unlock the region’s market is to translate consumer awareness into usage. As the survey results show, while 49% of respondents were aware of e-wallets and mobile wallets, only 35% actually use them. Furthermore, in countries such as India, Indonesia and Thailand, less than half of those surveyed actually use mobile phone payment system despite being aware of the option.
As Rohan Mahadevan, senior vice president for Asia Pacific at PayPal puts it, ‘There’s a lot of awareness of digital wallets, but engagement is much, much lower and there’s a big gap’. He also points out that the reasons why many people still prefer using cash
is the lack of information about each digital payment method and the kind of value it can provide. Furthermore, the complexity of setting up a digital wallet is a major stumbling block for many South East Asians, a region that still has relatively low education levels.
The onus, therefore, is on both government and the private sector to educate users about the digital payment options available to them. Indeed, in Singapore, there has been a drive to accelerate Singapore into a Smart Nation
after Prime Minister exhorted Singaporeans consumers and merchants alike to take up e-payment methods
, in a bid to catch up with China and the likes of WeChat Pay and Alipay. Likewise, there are strong arguments in favour of adopting e-payment solution, the most common of which is the need to remain efficient and relevant in an age dominated by fast-changing digital technologies
If anything, the report has revealed the potential that the region has for the e-payments industry. While the Chinese market is arguably saturated with the likes of WeChat Pay and Alipay, there are no dominant forces within the South East Asian market. Currently, the market is fractured into a multitude of different payment providers, each operating within their own defined spheres of influence. If a payment behemoth like WeChat Pay is able to take root in the market, it is clear that harnessing economies of scale would enable the solutions provider to translate knowledge of the existence of digital payment methods into actual usage.
About FOMO Pay Pte. Ltd
FOMO Pay is an authorized partner of WeChat Pay
, Alipay, UnionPay, Baidu Wallet & BestPay in Southeast Asia, and was selected as one of the Top 100 Asian Companies by e27, Top 100 Startups by Red Herring Asia, and Top 8 by DBS’ FinTech Accelerator Program, Top Fintech Startups in Singapore by Fintech Asia. FOMO Pay provides a one-stop solution for local merchants by facilitating payment collection from China market, including Chinese tourists. This comprises of online payment and in-store payment modes. FOMO Pay’s business solution serves clients from a wide range of industries, including the telecom, publishing, tourism and hospitality, F&B, education and retail industries.