Why is Asia a hotbed of mobile payment technology?

Nearly 75% of Asian consumers use a smartphone, with a large proportion using their device to pay for goods and services. What does the future hold for this tech-savvy region?

By Phil Pomford


In Asia we have seen the meteoric rise of apps such as WeChat and Alipay, which have made mobile payments mainstream by integrating the technology into the daily lives of Asian consumers. Mobile penetration in Asia is very high; nearly 75% of Asian consumers use a smartphone, and the majority uses their mobile device to pay for goods and services. With the likes of Tencent and Alibaba offering a one-stop-shop for commerce and payments, e-wallets offer an unrivalled level of simplicity and convenience, which has helped drive innovation within this space.


Mobile growth across the entirety of the region is driven by two main reasons. Firstly, the region has leapfrogged years of legacy technology, which has created an environment ripe for innovation and technological development. Secondly, the young Asian population is very tech savvy, which has resulted in the rapid adoption of new technologies. Businesses such as LINE, WeChat and Kakao have undoubtedly played an important role in bringing technology to the heart of Asian consumers’ daily lives.


It’s also important to remember that Asia has traditionally been dominated by cash, and that many consumers still prefer non-card payment methods. In China, for instance, we’ve seen people jump directly from cash payments offline to a robust mobile payments economy. Worldpay’s Global Payments Report found that more than 60% of online transactions in China are made using a non-card method. 


What are the most exciting, new and inventive mobile payments innovations in Asia? 


One of the most exciting things we have seen in Asia has been the rise of the “super-apps,” which have become the gateway to a host of consumer services, including payments, a trend which WeChat has pioneered in Asia. Although this trend has been quite unique in Asia until now, we are also starting to see Western companies adopt this philosophy. Facebook, for example, have been working to expand their services around Messenger, including integrating P2P payments and Uber services into the messaging interface.


I also see invisible payments as one of the most exciting trends to look out for. Internet of Things technology is reaching the point of ubiquity, which means payments will follow. Smart cars, smart houses and smart offices all have the potential to contain a payments element. Recently, Alibaba unveiled its connected car, enabling drivers to pay for parking, gas and coffee without leaving the vehicle. This has been a relatively untapped market thus far, but I see this as a huge opportunity moving forwards.


What emerging economies are next?


With a population of 250 million, Indonesia’s sheer size and rank as one of the world’s top 20 economies indicate that it is primed for a mobile payments explosion. The Philippines is also an exciting market. More than half of the country’s 100 million inhabitants is English speaking and it’s not hard to imagine it following in the footsteps of Thailand, the only other Asian nation that ranks among the world’s top 20 countries by English speaking population. However the real story here is the continuing dramatic growth of SEA as a whole to become one of, if not the, largest ecommerce markets in the world overtaking Europe, US and China.


What other kinds of digital payments should we expect soon?


We can expect more integration between social media apps and payments. Messaging apps have become a true hub for Internet activity in Asia. WeChat and LINE have integrated both the supply and demand for goods and services in their applications, so it’s only natural for these companies to close the loop by bringing payments into the ecosystem as well.


We are also starting to see Asian companies look at how they can capitalize on micropayments. Online businesses like Japan’s Hangame have been successful by letting users play for free and just charging them a fee to customize their in-game avatars. These impulse-driven micropayments add up quickly. South Korea’s Nexon Corp. attributes all its profits to in-game micropayments and is now valued at $266 billion[1].


We will also see micropayments become more aligned with cryptocurrencies like Bitcoin, which are virtual, instantly transferrable and allow users to mask their personal details. Bitcoin ATMs are already popping up across Asia – the Bitcoin Philippines Corporation launched its first two-way ATM in Manila in 2015[2] and ANXBTC Bitcoin, Alitobit and the Bitcoin Group Hong Kong all introduced Bitcoin ATMs to Hong Kong in 2014[3].

[1] http://abcnews.go.com/Technology/story?id=5747754

[2] https://www.cryptocoinsnews.com/philippines-first-two-way-bitcoin-atm-opens-heart-manilas-financial-district/

[3] http://www.scmp.com/news/hong-kong/article/1448009/three-companies-set-launch-bitcoin-atms-hong-kong-within-days



about the author


Phil Pomford leads the Worldpay Global eCommerce team across Asia Pacific which operates from three offices in Singapore, Japan and China, as General Manager.  Phil has over 12 years of experience in financial services in payments, acquiring and credit card issuing with companies including Citi, Diners Club, American Express and Worldpay. Having lived in Asia for 19 years, he has held diverse management roles across Asia Pacific and developed key strengths in customer development, strategy, financial planning, and new market entry. He has a degree in Accounting and Law and is currently completing an MBA with Manchester Business School.  For more information visit www.worldpay.com/global