With the on-going pandemic accelerating global digital payment adoption at a rapid pace, experts are now adjusting their predictions: what was previously thought of happening in years is now on track to being embraced in months.
As shoppers across Southeast Asia have gone from trooping shopping malls to browsing websites, it is worth noting that consumer habits change as online shopping becomes the new normal for economies under lockdowns.
While there are many countries in SEA where cash remains the preferred method of payment, a behavioral shift to digital is happening across multiple transaction decisions — from food deliveries, grocery shopping, and even bill payments.
According to Rajkishore Agrawal, Senior Director, Head of Sales, Southeast Asia at PayPal, the recent PayPal 2020 PH Consumer Survey revealed that 87% of Filipinos have increased their usage of digital payment platforms during the pandemic, with 9 in 10 preferring to pay digitally instead of with cash during this trying time.
The same kind of trend is also being seen across different countries in the Southeast Asian region. A report cited Malaysia as the leader in the increase in usage of electronic wallets (e-wallets) in the region at 40%, followed by the Philippines (36%), Thailand (27%), and Singapore (26%).
SEA Digital Payments Driven by Mobile Commerce
Mobile is fast becoming the preferred channel for electronic commerce in the Southeast Asian region, thanks to a large user base of younger shoppers. The use of mobile apps and e-wallets are driving factors for the demand for in-app payment solutions.
The Philippines is seen as one of the fastest-growing e-commerce markets in Asia with a growth of 28% year-on-year as of January 2020 — 173.2 million mobile connections, translating to 159% of the country’s total population.
Trust Out of Necessity
Digital payments are fast gaining currency in Southeast Asia as people ditch cash to avoid physical contact on worries over catching COVID-19, but continuous use will always be anchored on the fundamental principles of trust and security. Consumers need to be able to trust financial services providers to secure their money.
The PayPal 2020 PH Consumer Survey also shows that in the Philippines, almost half (49%) identified security as the topmost consideration when choosing which digital payment platforms to use. And this rings true for many online consumers from other countries as well.
Giving their 325 million active account holders the confidence to connect and transact online, on mobile, in an app, or even in person is part of PayPal’s mission. With the goal of offering people better ways to manage and move money across 200 markets using different currencies, trust is the foundation of PayPal’s business. Using 24/7 transaction monitoring, anti-fraud technologies, and Buyer Protection, PayPal enables users to transact with peace of mind.
A New World of Global Opportunities
There’s now an unparalleled urgency for merchants to be proactive in the usage of digital payments, and this unlocks a new world of global opportunities. At the same time, digital payments also open the door for more choices for consumers, as cross-border shopping becomes a seamless experience.
Now more than ever, individuals and businesses need to stay connected to the online economy as the pandemic leads to a digital shift in our way of life. For us at PayPal, this means doubling down on our commitment to make payment experiences as frictionless and secure as possible.