The global digitisation of payment methods has seen significant growth in recent years, with more and more people utilizing virtual payment options.
According to data from Statista, the total transaction value in the digital payments market is forecasted to reach US$287.20bn this year. The annual growth rate is expected to be 9.77%, reaching a projected total of US$417.00bn by 2028.
This article examines the growth of the digital payments ecosystem in Southeast Asia, driven by various factors, and highlights some of the most commonly used payment methods in the region.
The most popular virtual payment methods in Southeast Asia
The Southeast Asia region consists of countries with diverse cultures and demographics, yet it is possible to identify some of the most commonly used virtual payment methods in the area.
Mobile wallets
The mobile wallet market segment has experienced rapid growth in Southeast Asia in recent years.
A mobile wallet, as defined by Investopedia, stores credit or debit card information on a mobile device, enabling users to make convenient and secure online or in-store purchases. Companies like Lineman, GrabPay, and DOKU are now offering virtual wallet services to millions of users in the region.
Claudio Cossio, Co- Founder of Meta Pool, mentioned, “Southeast Asia had an early advantage in digital payments; the potential lies in how blockchain protocols enhance super apps or compete with mobile offerings like Saga and Jambo phones.”
Virtual credit cards
The availability of virtual credit or debit cards is increasing, allowing users to make online payments for goods and services, including popular applications like Grab and Food Panda.
Cryptocurrencies
Cryptocurrencies are emerging as a growing option for virtual payments, with more companies accepting them as a means of payment. Stable cryptocurrencies are commonly used for transactions within the crypto market.
Pavel Zavadskii, founder of Biqutex, noted, “Cryptocurrencies are rapidly becoming one of the preferred methods for paying for goods and services in Asia, primarily due to low transaction fees and minimal regulatory barriers.”
Factors driving the growth of the digital payment ecosystem
Various economic, technological, and cultural factors contribute to the growth of digital payment methods in Southeast Asia. Some key factors include:
New technologies and infrastructure
Advancements in technology, such as 5G mobile infrastructure and faster internet connections, have facilitated the widespread use of digital payments in the region.
E-commerce growth
The booming e-commerce sector has led to an increased demand for digital payment solutions that streamline online transactions.
Financial inclusion
Digital payments provided by startups and crypto companies have contributed to greater financial inclusion by offering services to those without access to traditional banking systems.
Government support
Governments and regulators are actively promoting digital payments to develop a sustainable digital economy.
Rising demand for digital payments
There is a growing preference for secure and efficient payment methods over cash, leading to an increased demand for virtual payment options in Southeast Asia.
The surge of cryptocurrencies
The cryptocurrency market has seen significant growth in recent years, influencing consumer preferences towards using cryptocurrencies instead of traditional cash payments.
In conclusion, the digital payment landscape in Southeast Asia is evolving rapidly, driven by economic, cultural, and technological advancements.
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