A top down regulatory push toward cashless societies will stimulate exponential growth in the mobile payment market in Asia-Pacific (excluding China and India), which will surge from $71.92 billion to $271.47 billion by 2021, research from Frost & Sullivan indicates.
According to the research firm, the number of active customers will also double to 130.8 million users by this time.
With standardization and increasing openness toward FinTech, competition is intensifying for the entire supply-side ecosystem. Mobile payments solution providers will need to fully understand the mobile payments market in the region to gain an edge.
Asia-Pacific is expected to continue to lead the world in mobile payment developments as smartphone penetration here is the highest. Apple, Samsung and Google with Apple Pay, Samsung Pay and Android Pay have also addressed existing security concerns through tokenization in the payment infrastructure, supplemented by biometrics on the smartphone.
“The mobile payments market in Asia-Pacific, however, is guided by local preferences and considerations,” noted Frost & Sullivan Digital Transformation Industry Principal Analyst Quah Mei Lee.
“For instance, in Indonesia and the Philippines, telcos lead with their e-money products whereas in Japan, South Korea and Australia, credit card is the key payment method. Understanding these dynamics is critical for mobile payments solution providers to succeed.”
Mobile payment in Asia-Pacific is being led by developed countries such as Japan, South Korea, Australia and Singapore. Japan and South Korea has dominated since the early days of near-field communications (NFC) in 2011 and continues to account for 89.2% of market revenue share in Asia-Pacific.
Among mobile payment market segments, m-commerce dominates despite the rapid increase in point-of-sale (POS) payment transaction volumes. The strong deployment of NFC in some countries is expected to help expand POS payment shares.
For now, the mobile payment market has the most promise in countries that have a mandate to go cashless, like South Korea, Australia, Singapore and Malaysia. These will be followed closely by countries such as Thailand and Vietnam which are slowly transitioning to cashless.
“The opportunities are limitless and mainstream integration of mobile payments into everyday life is already underway,” said Quah. “Even beyond this, there is tremendous potential for growth alongside connected devices in the Internet of Things era.”