APAC boasts highest digital wallet spending in the world

China, Japan, and Singapore are frontrunners in digital wallet adoption.

The Asia Pacific region makes up over two-thirds of global digital wallet spend at $9.8t, equivalent to 70%, according to a 2024 report by Deloitte on cross-border payments.

APAC also has the highest digital wallet penetration rates amongst all regions: 50% or $7.8t for all digital wallet spending at point-of-sales (POS).

Amongst countries, China remains the frontrunner in digital wallet adoption, with digital wallets accounting for 82% of all its e-commerce transactions in 2023 and two-thirds of its POS spending at the same year.

Alipay and WeChat comprise over 90% of all digital payment transactions in China, Deloitte added.

Japan has also seen its cashless payment ratio climb to 39.3% in 2023– ahead of its target of having 40% of all transactions be cashless. However, its cashless payments market remains fragmented with many major players.

“Whilst Japan’s cashless payments market is fast growing, security still remains a concern for many Japanese consumers,” Deloitte said.

In terms of innovation, Singapore leads the pack, with Deloitte hailing it as having “one of the most advanced payment systems in the world.”

However, whilst e-wallets have become more prevalent in the Lion City, they are not as prevalent as in other countries in the region. Its payment market is highly competitive, with GrabPay dominating the digital wallet market, according to Deloitte.

Beyond these highly-developed markets, Deloitte also hailed Malaysia for having made “considerable progress in adopting digital payments.”

Account-to-account (A2A) payments accounted for 39% of all e-commerce spending in 2023, and digital wallets are reportedly second choice for both online and POS transactions. 

Overall, Malaysia is still heavily reliant on cash, according to Deloitte.

Superapp and partnership evolution
Deloitte noted four growing trends in the region’s cross-border payment revolution, one of which is that the digital wallets space is attracting numerous players– leading to more partnerships with e-wallets and fintech players.

Many e-wallets and banking apps are also evolving to become super apps, in response to the omnichannel commerce trend post-pandemic.

“Responding to the trend of omnichannel commerce post-pandemic, e-wallets and banking apps are quickly evolving into super apps by assembling a suite of services into their integrated platform” Deloitte said.

For example Livin’, a superapp by Mandiri, has been named the “fastest-growing mobile app” in Indonesia in 2023, according to Deloitte.

“Many retailers and merchants are undergoing omnichannel transformations to create a seamless, personalized user experience,” the report said.

Cross-border payment interoperability is another key trend, with Deloitte noting public and private efforts have been made to upgrade digital infrastructure. 

For example, Singapore’s and Cambodia’s national QR schemes have partnered with Alipay+ to bridge the cross-border gap between their home QR schemes. 

Cross-border payment linkages have also been launched in Southeast Asia, Deloitte said.

Small businesses included
Finally, micro, small and medium enterprises (SMEs) have entered the scene, with payment solutions and innovations helping these small businesses to grow and reach global markets. 

These companies are also helping the MSMEs in their digital and sustainability transformations.

However, Deloitte warned that the growth of the payment landscape has also increased the threat of financial crime, and that MSMEs may be amongst the most vulnerable.

“Concerns over financial crime are further heightened as more MSMEs deepen digitalization whilst having limited resources allocated to cybersecurity,” the professional services firm warned in the report.

“Industry-wide collaboration and public-private partnerships will be paramount to carrying out cooperative, pragmatic approaches to bring fintech innovations and digitalization to fruition and to drive long-term social impact,” Deloitte concluded.