Is cash still king? Digital payments eroding cash’s dominance in SEA

Internet economy in SEA has propelled digital payments further.

Cash may remain king however digital payments are starting to wear down its dominance as the internet economy in Southeast Asia highlights the popularity of digital services like e-commerce, ride-hailing and food delivery according to Willy Chang, associate partner at Bain & Company.

Speaking at the Asian Banking & Finance FSI Conference, Chang emphasized how digital payments are starting to gain momentum on the back of the growth of the internet economy.

According to Chang, the internet economy continues to attract new consumers every year with 40 million in 2020 and another 20 million in the first half of 2021. This is not surprising as nine in 10 new users from 2020 continue to be digital consumers today.

Meanwhile, Alessandro Magarini Montenero, Partner at Bain & Company added that digital payments are eroding cash’s dominance with growth expected to further accelerate by 2025.

Digital payments also see a boost from SEA as e-wallet adoption starts to take pace. According to Montenero, SEA is the home to large underbanked and unbanked populations, which e-wallets can help leapfrog challenges in obtaining cards and bank accounts. For many, it is their first experience with digital payments.