Mastercard: APAC ahead on digital payment adoption

Consumers in the Asia Pacific region (APAC) remain among the most enthusiastic adopters of digital payments in the world, with 88% having used technologies like digital wallets, QR codes, buy now pay later (BNPL), cryptocurrencies, biometrics and others in the last year, according to Mastercard’s second annual New Payments Index (NPI)*, a global consumer survey spanning 40 markets across five regions, including seven in APAC.

What’s more, 69% of APAC consumers increased their usage of at least one digital payment method during the same period, demonstrating momentum. In comparison, only 52% of consumers in North America and 48% in Europe increased their usage in the same way.

While the COVID-19 pandemic was the catalyst for the unprecedented, rapid uptake of digital payments, the latest research indicates that the change has been lasting, with 40% of survey respondents in APAC cutting back on their use of cash in the last year. Despite this swing to digital forms of payment, respondents frequently indicated that they had reservations about the security and institutional backing of these new options. In fact, when deciding which payment method to use, security had the greatest influence on consumer choice, beating out discounts/promotions, rewards and even low interest rates.

Sandeep Malhotra, Executive VP, Products & Innovation, Asia Pacific at Mastercard said, “Consumers in the Asia Pacific region have consistently shown a willingness to adopt innovative new technologies—and payments are no exception. Given the sheer speed with which payment options are proliferating, coupled with today’s global climate of uncertainty in socioeconomic, health and political matters, it’s important that banks, governments and other stakeholders in the financial ecosystem proactively support the sustainable development of these new payment methods, including through regulation, bolstering security, and educating consumers. With reassurances such as these, it’s likely we will see even more extensive adoption of emerging payment technologies in the region.”

APAC report highlights included:

Biometrics vs privacy

There’s broad recognition among consumers that using biometric identification, such as fingerprint or facial recognition, is easier than remembering PINs or passwords (70%), and more secure than these traditional methods of verification (69%). However, only around half (53%) of respondents in APAC felt comfortable sharing their biometric data to save time, while 72% were concerned about which entities would have access to this data. Despite this, 58% of consumers used biometrics more frequently in the last year, demonstrating both an enthusiasm for the technology, and untapped potential if providers are able to properly address consumers’ misgivings about privacy.

BNPL awareness is high but comfort is mixed

APAC is ahead of the curve with BNPL as half of consumers across the region say they are comfortable using BNPL today, compared to 41% of consumers globally. In particular, consumers in APAC tap on BNPL offerings for their low/no interest payments, in times of emergency and when they want to expedite bigger purchases. Looking ahead, 55% in APAC say they are likely to use BNPL in the next year. At the same time, building trust and comfort is key as APAC consumers feel safer using BNPL solutions backed by a major payment network (67%) or their existing bank (65%), rather than from other providers.

Broad awareness of new digital currencies and assets

The majority of consumers in APAC have heard of cryptocurrencies (88%), non-fungible tokens (NFTs) (68%), and other digital assets—but uptake has been gradual. For now, the focus is on investment. Among APAC consumers, 31% (44% of APAC Millennials) report investing in crypto during the past year, while future use cases that are popular among respondents include using crypto to redeem rewards, invest and make everyday payments. Regarding the latter, just under half of respondents (46%) want increased flexibility to use crypto for everyday payments.

Source: Mastercard NPI fact sheet. Consumers in APAC lead in digital payment adoption.

According to those surveyed, more involvement from governments and dependable institutions like banks (cited as the most trusted provider of digital currencies) would boost their confidence in crypto. Six in 10 agreed that governments should regulate the cryptocurrency and stablecoin industry, while 55% would feel more confident investing in crypto or digital currencies that are issued or backed by a reputable organisation.

*Mastercard’s New Payments Index analyses consumers’ evolving attitudes, preferences, and behaviours around emerging payment methods and uncovers insight into their motivations and considerations when it comes to digital payment adoption. The 2022 New Payments Index research was conducted by The Harris Poll and Mastercard from March 21 to April 19, 2022, surveying 35,040 respondents in 40 markets, including 7,004 respondents across seven markets in APAC: Australia, China, India, Japan, New Zealand, Thailand and Vietnam.