Digital payment trends soar in Asia Pacific, 2024 report

A new Forrester report has highlighted the rapid advancement and transformation in digital retail payments within the Asia Pacific region, including significant trends observed across Australia.

The report, "The State Of Digital Retail Payments In Asia Pacific, 2024," explores the dynamics influencing the digital payments sector. It focuses on six key markets: Australia, metro China, Hong Kong, Singapore, Malaysia, and Indonesia. These insights reveal both opportunities and challenges shaping the digital payments landscape.

Digital wallets and application-based payment systems are experiencing sustained growth across the Asia Pacific region. This trend is evident in mature economies such as Singapore and Hong Kong and rapidly growing markets like Indonesia and Malaysia. Consumers in these regions have highlighted the convenience and ease of use as primary drivers for their adoption of digital payment solutions.

Despite the focus on digital payment advancements, cash continues to be relevant. The report notes that cash remains an important payment method, accounting for a substantial portion of online and offline transactions in countries like Malaysia and Singapore. Notably, in 2024, 20% of online consumers in Singapore reported having used cash for online purchases within the past three months. This continued preference for cash suggests ongoing barriers to fully digital payment systems.

The rise of Buy Now, Pay Later (BNPL) services has been remarkable in 2024. They are rebounding in popularity, especially among Generation Z and Millennial consumers, who appreciate these services' flexible terms and zero-interest payment options. In Australia, 30% of consumers under 35 reported using BNPL for online transactions within the past three months, reflecting a significant uptake in this demographic.

The report also highlights the emerging adoption of cryptocurrencies and stablecoins as payment methods. Growing consumer trust in cryptocurrencies is leading to an increase in their use for payments. For instance, in Indonesia, the number of consumers using cryptocurrency for online purchases rose significantly from 7% in 2023 to 24% in 2024.

Central Bank Digital Currencies (CBDCs) are also gaining traction, with countries like metro China spearheading adoption through governmental support and collaborations with fintech firms. The report notes that in metro China and metro India, 17% of online adults reported using a CBDC for online transactions in the past three months.

The Forrester report highlights a dynamic digital payments landscape in the Asia Pacific, where digital wallets, BNPL services, and cryptocurrencies are growing alongside the continued relevance of cash. This coexistence of traditional and new payment methods suggests a transitional phase, pointing towards a future where diverse consumer preferences shape a balanced integration of payment solutions across the region.