Real-time payments redefining Asia-Pacific e-commerce market

In a new whitepaper, FYST outlines how Asia-Pacific’s consumers and merchants are the trailblazers for digital payment usage – and the significant shifts we can expect to see as this regional hotbed of innovation continues to break through infrastructure barriers.

FYST’s data, gathered across 12 countries (Australia, New Zealand, India, China, Japan, Thailand, South Korea, the Philippines, Bangladesh, Vietnam, Indonesia and Malaysia) shines a light on the proportion of cards, bank transfers, digital wallets and other methods used for online purchases in each country.

The research also outlines which payment methods and card types are used in each country, demonstrating how important it is for merchants to be able to accept a wide array of locally-used payment methods to maximise transaction conversion.

The Asia-Pacific region is known as the birthplace of the digital wallet, and in certain markets wallets have become the dominant payment method for e-commerce across the continent, helped by the surging popularity of China’s WeChat Pay and Alipay across the region.

In such an incredibly diverse landscape, with vastly differing payment habits and e-commerce usage evident from market to market, digital wallets represent nearly 70% of e-commerce transaction value across the region as a whole, and growth rates suggest no sign of slowing down.

And now, the region’s shoppers and sellers are benefitting from the launch of real-time and instant payment systems.

While e-commerce transactions across the region as a whole are still dominated by digital wallets and card payments, we can expect to see bank transfers and account-to-account (A2A) transactions taking a greater share of online purchases, with real-time payment infrastructure going live in more countries over the next few years.

Given the dominance of WeChat Pay and Alipay, not just across the Asia-Pacific region, but their growing popularity across the world too, it’s simply not an option for merchants wherever they are located to ignore these two digital wallet giants.

Although credit cards remain popular, debit cards tend to be used more in mature economies like Australia and New Zealand, helped by adherence to international schemes and industry security mandates.

The growing popularity of BNPL in online checkouts is evident in mature markets too, and Australia can justifiably claim to be the birthplace of BNPL given the proliferation of digital lenders there.

In New Zealand, BNPL services are set to comprise around 17% of ecommerce expenditure by 2025.

The launch of India’s Unified Payments Interface (UPI) in 2016 shows how the introduction of real-time payment infrastructure is a game-changer for e-commerce payments, with consumers in India increasingly favouring bank transfers for online purchases.

The Philippines’ InstaPay service and Indonesia’s BI-FAST system are set to spur usage of A2A transfers for e-commerce transactions.

For less mature e-commerce economies, cash-on-delivery remains a popular way to pay for online purchases, comprising around 90% of online transactions in some markets, but their share is expected to decline due to internet and mobile infrastructure improvements enable more consumers to transact through their phones.

In nascent e-commerce markets such as Bangladesh, we’re seeing how infrastructure improvements are helping to promote financial inclusion, which in turn generates economic growth.

More than 2,500 online businesses were operating in Bangladesh as of 2021, with a growing number integrating accounts to accept credit card transactions.

These variances show how important it is for merchants to add localised payment methods, local currencies, and tailor payment acceptance strategies carefully to each market.

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