India, along with China, has emerged as a leader in the Asia-Pacific (APAC) region in the adoption of digital payment methods for e-commerce transactions, outpacing traditional payment methods like cash and bank transfers, according to a report.
A study by GlobalData, a data analytics and consulting company, revealed that India has witnessed the fastest growth in the share of alternative payments in the APAC region. From 20.4% in 2018, the share of alternative payments surged to 58.1% in 2023, catapulting India to the second position in the region just behind China.
The report attributed this significant increase to the widespread use of mobile wallets, particularly driven by the Unified Payments Interface (UPI), which facilitates real-time mobile payments by simply scanning QR codes.
"India has seen a remarkable uptake in alternative payment solutions, largely due to the popularity of mobile wallets enabled by UPI. This trend is transforming the payment landscape, making digital and mobile wallet payments the preferred choice for e-commerce transactions," the report noted.
In the APAC region, mobile and digital wallets have become the preferred payment tools for e-commerce, with countries like India and China leading the adoption. The report highlighted that even traditionally cash-intensive markets such as the Philippines, Malaysia, and Indonesia are witnessing a shift towards alternative payment methods, although at a slower pace compared to India and China.
Shivani Gupta, Senior Banking and Payments Analyst at GlobalData, commented on the trend, "While cash has traditionally dominated in Asian markets, the adoption of alternative payment methods is accelerating due to increased smartphone and internet penetration. This is further bolstered by the convenience and security offered by digital payments and the growing acceptance of mobile and QR code-based payment solutions."
According to GlobalData, alternative payment solutions now account for more than 65% of the e-commerce transaction value in China, the largest e-commerce market globally. In contrast, India, which had a share of 20.4% in 2018, has significantly increased its adoption rate, reflecting a rapid shift towards digital payments.
"China's mobile wallet market is one of the most mature globally, with platforms like Alipay and WeChat Pay widely used for both online and offline transactions," the report added.
Countries such as Indonesia, Hong Kong, Singapore, and the Philippines are also experiencing a high adoption rate of alternative payment solutions, driven by increased internet and smartphone penetration and the growing willingness of merchants to accept digital payments.
Gupta emphasized that the convenience, speed, and security offered by alternative payment methods, coupled with the expected growth in the e-commerce market, will continue to drive the adoption of digital payment tools and transform the consumer payment landscape in the APAC region.
The survey, conducted in the second quarter of 2023, included approximately 50,000 respondents aged 18 and above across 40 countries.
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