Steep growth in mobile payments across Asia Pacific is forecast by IDC, as a result of financial inclusion policies and the rise of so-called semi-closed wallets that are linked to bank accounts.
Governments across the region want to engage with the unbanked, often putting mobile-based services at the forefront of such policies. Plus, limited penetration of credit/debit cards encourage a shift to mobile wallets linked directly to users’ bank accounts.
IDC predicts worldwide mobile payments will account for US$1 trillion in value in 2017, up 124 per cent from the less than US$500 billion expected in 2015. Asia Pacific markets will contribute greatly to this global growth as m-commerce becomes popular across the region. In fact, the region is expected to lead the world on mobile payments.
There is a duality in the region between more mature markets like Australia, Hong Kong and Singapore, against the emerging Asian economies such as China, India and Indonesia.
The more mature markets have strong penetration of banking and card adoption and will likely tread a similar path to many Western economies with mobile payments, with a focus on proximity solutions based on Near Field Communications (NFC). These will be strong markets for the likes of Apple Pay and Android Pay.
However, Asia’s emerging markets, which account for most of Asia’s population, are likely to follow another path. They will more likely adopt semi-closed wallets, where consumers top-up their mobile wallets in a similar way to a prepaid mobile account by linking to their bank accounts.