THE pandemic has disrupted businesses globally as most industries have been impacted by the COVID-19 crisis. However, there are several industries which are thriving amid the crisis and global payment industry is one of them.
The global shift to digital payments has been positively affected by the crisis as there’s a strong push towards a cashless society.
Concerns over the possible transmission of the virus through hard cash has led to a boom in the usage of digital payments systems which saw the global digital payments market grew by 21% year-on-year (yoy) in transaction value during 1H 2020 (according to the research data analysed and published by Finnish website Sijoitusrahastot).
Meanwhile, a survey conducted by Mastercard – an American multinational financial services corporation – in April 2020 saw contactless card transactions grow twice as fast as non-contactless transactions globally between February and March 2020 due to concerns of possible transmissions of COVID-19 through physical contact.
It was also found the use of digital payments in Asia has grown by 2.5 times compared to pre-COVID times. Also, 75% of its Asia-Pacific (APAC) respondents said they would continue to use digital payments even post-COVID-19.
In fact, a 2017 study done by Mastercard found that APAC leads the world when it comes to using digital wallets. In 2019, APAC’s digital payment industry generated around US$1.9 tril in revenue with China contributing two-thirds of the total amount.
The market experienced a significant growth in 2020 due to the escalating number of digitally active consumers. Over the three-month period leading up to November 2020, there was an increase of 20% in the number of digital users making contactless payments in Asia.
According to Statista –a German based company specializing in market and consumer data – the total transaction value in digital payments is projected to grow at 23.7% in 2020 to reach US$4.93 tril. The number of digital payment users is forecast to increase by 10.1% yoy to reach 3.47 billion in 2020.
For Asia as a whole, Statista forecasts that digital payments will reach US$2.88 tril in 2020 while China is expected to take the lead globally and is set to generate US$2.31 this year.
The global payment industry is likely to continue growing as the use of cashless payments are expected to surge even post-COVID-19. In the period between 2020 and 2024, the global digital payments market is expected to grow at a 13.4% compound annual growth rate (CAGR) to reach US$8.17 tril by 2024. – Dec 29, 2020
