Market Trends of APAC Mobile Payments Industry
This section covers the major market trends shaping the APAC Mobile Payments Market according to our research experts:
Retail Industry is one of the Factor Driving the Market
- The Asia Pacific region is anticipated to witness significant growth in the market studied as countries, such as China and India, adopt the digital mode of payment using digital and mobile wallets. The ubiquitous mobile devices, advanced digital infrastructure, and the growing usage of apps drive digital/mobile wallets, which are growing rapidly in the Asia-Pacific region. According to the global payment report 2020, digital and mobile wallets account for 58% of regional e-commerce payments and are expected to reach 68.2% by 2023.
- Further, the e-commerce sector is witnessing a spike in demand as consumers order essential items such as food and clothes, among others, through e-commerce websites, where most consumers prefer the digital mode of payment. According to the Reserve Bank of India's (RBI) digital payments index (DPI), launched in January 2021 to indicate the extent of digitization of payments in India, the index for September 2021 stood at 304.06 against 270.59 in March. This indicates the rapid adoption and deepening of mobile payments across the country.
- Some of the prominent players in the industry, through investments, have been able to better serve their consumers by providing them with safe and secure modes of mobile payment gateways. For instance, in July 2021, Digital payments giant Paytm, one of India's most valuable startups, plans to raise USD 2.2 billion in an initial public offering. Paytm, which was until recently the most valuable startup in India, intends to raise USD 268 million in a pre-IPO round.
- In August 2021, Aeon, a retail company established in Japan, announced the introduction of Aeon Pay, a mobile payment service, in September 2021. Aeon plans to combine its online shopping operations and prepaid cards under Aeon Pay to make its mobile payment service a nifty app that any retailer may use. The business is one of the newest participants in Japan's thriving mobile payment market. Internet companies compete to develop one-stop shopping options for various services, including banking, travel, and telephone access.
- According to the National Bureau of Statistics of China, In 2021, the total retail sales in China increased by around 14.2% compared to the 2109 year 8.1%. Such an increase in retail sales will drive the studied market in the region.
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India to be the Fastest Growing Adopters of Mobile Payments
- The Indian market has historically been dominated by cash and is rapidly evolving to meet the demands of the digital payment culture; as a result of an increase in e-commerce and m-commerce culture, cards and digital wallets are rising in prominence. With the growth of various digital wallet companies in India, mobile payment is expected to increase.
- The demonetization scheme announced by Prime Minister Narendra Modi in 2016 led to a surge in the adoption of digital payments across the country. The government further bolstered cashless transactions through mobile devices by launching the BHIM application in 2016, based on the unified payment interface (UPI).
- Amid the coronavirus outbreak, India's government urged consumers to use digital payment methods as preventive and safety measures. Also, the RBI has proposed that customers use digital banking systems. NPCI also started an 'India pay safe' campaign to boost digital payments since exchanging cash could spread Coronavirus.
- UPI has proven to make the lives of many Indian users much easier. UPI is a popular real-time payment method that allows users to instantly transfer funds from one bank account to the other. There are several benefits associated with the UPI payments system, such as hassle-free online payments anywhere, a safe and secure mode of money transfer, and Users can make payments by scanning QR codes. These factors resulted in the dramatic rise of the UPI payments system as a preferred payment system in India.
- Furthermore, the UPI payment system is further increasing mobile payments by becoming a single user interface for all of an individual's bank accounts, eliminating the need to download multiple banking apps. Most banks and non-banks have adopted the UPI payment system. For instance, as per NPCI data, the number of banks that were live on UPI increased from 220 in April 2021 to 316 in April 2022.
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