India has emerged as the fastest-growing market for digital payments in the Asia-Pacific (APAC) region. This surge in digital payment adoption is largely driven by the widespread use of mobile wallets and Unified Payments Interface (UPI), which enables real-time mobile payments through QR code scanning. According to a report by data analytics and consulting company GlobalData, the share of alternative payment methods in India jumped from 20.4% in 2018 to 58.1% in 2023, placing India just behind China in the APAC region.
Shift from Traditional Payment Methods
Across APAC, the popularity of online payment methods for e-commerce has skyrocketed, leading to a decline in traditional payment methods like cash and bank transfers. In 2023, China led the region in alternative payments, with India closely following. GlobalData’s report highlights that the significant uptake of mobile wallets in India, driven by UPI, has been a key factor in this growth.
Dominance of Alternative Payments
Alternative payment solutions have become the most popular tools for e-commerce transactions in APAC, thanks to the widespread use of mobile and digital wallets. While countries like China and India have already embraced these methods, cash-intensive markets such as the Philippines, Malaysia, and Indonesia are also experiencing a shift towards digital payments. However, the adoption rates in China and India remain higher compared to their peers.
Expert Insights
Shivani Gupta, Senior Banking and Payments Analyst at GlobalData, comments: “While most Asian markets are traditionally cash-dominated, the adoption of alternative payment methods for both online and in-store payments is growing across many markets in the region, outpacing the West. This trend is driven by the rising smartphone and internet accessibility, increasing convenience of electronic payments, and the proliferation of mobile and QR code-based payment solutions.”
E-Commerce and Mobile Wallets in China
China, the largest e-commerce market globally, sees more than 65% of its e-commerce transaction value coming from alternative payment solutions. In 2018, this share was 53.4%, compared to India’s 20.4%. China boasts one of the most mature mobile wallet markets, with Alipay and WeChat Pay being ubiquitous in both daily transactions and online payments.
Growth in Other Asian Markets
Other Asian markets such as Indonesia, Hong Kong, Singapore, and the Philippines are also witnessing high adoption rates of alternative payment solutions. This trend is driven by increasing internet and smartphone penetration and the growing acceptance of digital payments by merchants.
Future Outlook
The convenience, speed, and security offered by alternative payment methods are expected to further drive their adoption, disrupting the consumer payment space in the region. As the overall e-commerce market in APAC continues to grow, these digital payment tools are anticipated to gain even more traction.
Survey Details
The findings from GlobalData’s report are based on a survey conducted in the second quarter of 2023, involving around 50,000 respondents over the age of 18 across 40 countries.
In summary, India’s rapid adoption of digital payments, driven by UPI and mobile wallets, has positioned it as a leader in the APAC region. This trend is expected to continue, supported by the increasing convenience and security of electronic payments.
