Asia Pacific is at the forefront of a global trend toward increasing complexity in the online payments market, according to research from payments company Worldpay.
The research found that consumers across APAC increasingly prefer to pay online via alternative payment methods such as e-wallets, bank transfers and cash on delivery.
The annual Global Payments Report states that the Asia Pacific e-commerce market will grow by an average of 12% annually, and is set to be worth $2.1 trillion by 2021.
Alternative payments are cementing their place at the heart of online shopping in this region – echoing a global trend toward fragmentation in online payments, as options like mobile wallets, pre-paid cards and bank transfers continue to steal market share from more traditional payment methods like credit and debit cards.
The report found that in China – the world’s largest e-commerce market – most consumers prefer to pay with an e-wallet such as Alipay, Tenpay or WeChat Pay. E-wallets now account for 62% market share in China. Meanwhile credit cards are currently the second most popular payment method for online shoppers (10%), and bank transfers are set to overtake credit cards by 2021, increasing their market share to 14%.
This growing preference for alternative payments can be seen amongst online Asian shoppers:
- In Hong Kong, e-wallets are catching up to credit cards, and are set to make up more than a quarter of the online payments market (28%) by 2021.
- In Singapore, while credit cards are overwhelmingly the payment method of choice in 2017 (66% market share), by 2021 both bank transfers and e-wallets are set to nearly double in share; from 11% to 21% and 13% to 21%, respectively.
- In Australia, bank transfers are set to overtake credit cards by 2021, increasing 23.3 percentage points to become the most popular payment method, with a whopping 43% of the market.
- In India, e-wallets (26%) and bank transfers (24%) are already the most popular payment methods, and by 2021 credit cards are expected to decline from 12% to 8% market share.
Phil Pomford, general manager for Asia Pacific at Worldpay, commented that consumers are leading the charge in demanding more opportunities to use alternative payment methods online.
“While there are significant variations in how consumers in different Asian markets prefer to pay, a constant is that they are shifting away from more traditional options like credit and debit cards, and instead choosing e-wallets, bank transfers and cash on delivery,” he explained.