Covid-19 drives rapid shift in Asia's payment tech: Mastercard

• Almost all of Asia Pacific consumer will consider at least one emerging payment method
• QR codes especially popular in region; 45% likely to consider cryptocurrency

THE Covid-19 pandemic has accelerated enthusiasm for a broader range of payment technologies in the Asia Pacific region, according to the latest Mastercard New Payments Index.

The study noted that 94% of APAC consumers say they will consider using at least one emerging payment method, such as QR codes, e-wallets, instalment plans, cryptopcurrencies, biometrics and others, in the coming year, Mastercard said in a statement.

The Mastercard New Payments Index was conducted across 18 markets globally, including India, Australia and Thailand. It revealed that 84% of consumers in Asia Pacific already have access to more ways to pay compared to one year ago.

Of note for entrepreneurs, 74% of respondents said they would shop at small businesses with greater frequency if they offered additional payment options.

“Mastercard’s study finds that people in the Asia Pacific region haven’t just adopted new payment technologies—they have made deliberate shifts based partly on necessity, but also on considerations around personal safety, security and convenience, at a time when these concerns were paramount,” said Sandeep Malhotra, executive vice president, products and innovation, Mastercard Asia Pacific.

“Consumers in Asia Pacific have already gained recognition globally for their openness to new technologies and innovation, and these findings confirm that this trend is only set to continue as more digital payment options rapidly become mainstream in this part of the world.”

The index finds that the use of a range of payment tech is trending upwards, with comfort on payment tech increasing while the use of cash steadily decreasing. In fact, in the coming year, 69% of respondents in Asia say they plan to use cash less frequently, the study noted.

Meanwhile, digital or mobile wallets have gained significant popularity amongst consumers in Asia, with 68% of respondents anticipating using this type of payment in the next year, which is higher than the global average of 62%.

“This behaviour shift is reinforced by people’s desire for choice with 85% of consumers in Asia saying that they expect to make purchases when they want and how they want.

“Businesses that can provide multiple ways to shop and pay will be best positioned to meet the unique needs of this moment that are shaping the future of commerce for years to come,” argued Malhotra.

Payment trends in APAC

The survey also noted some interesting payment trends across the region. For one, 84% of consumers in APAC have seen their access to emerging forms of payments increase in the past year alone.

While 88% used at least one emerging payment type in the last year, two-thirds (64%) of all respondents (including 75% of millennials) say they tried new payment methods that they would not have tried were it not for the pandemic.

The index noted that as consumer demand increases, businesses of all sizes will face greater expectations to provide multiple ways to purchase and pay.

Some 80% of respondents agree that they now prefer to shop at stores that have both an in-person and online presence, and 69% are more excited to shop at retailers who offer the latest payment methods, the study noted.

Additionally, 60% of consumers polled say they would avoid merchants that do not accept electronic payments of any kind.

The study also found that QR Codes are especially popular in Asia. Of those who used QR codes for payment, 63% said they used them more frequently in the last year than they had in the past. In both Thailand and India, the number is 64%, above the global average of 56%.

The majority of respondents in Asia perceive new payment methods like QR codes to be cleaner (76%) and more convenient (71%) for in-person payments as it is likely consumers are using their own mobile device.

In Thailand and India, 77% and 71% of consumers respectively perceive QR codes to be secure while only 67% and 64% respectively perceive cash as a secure form of payment.

The rise of crypto

Mastercard’s index indicated that consumers are also increasingly showing interest in being able to spend crypto assets for everyday purchases. Forty five per cent of those surveyed in Asia say they are likely to consider using cryptocurrency in the next year – a huge jump over the 12% that has used it in the last year, and higher than the global average of 40%.

Millennials and centennials are relatively more comfortable using cryptocurrency (41%) compared to Gen X and boomers (26%), with 71% of millennials saying they are more open to using it than they were a year ago.

Geographically speaking, more consumers in Thailand (46%) and India (44%) are comfortable using cryptocurrency as compared to consumers in Australia (17%).

Beyond that, the index found that consumers are more comfortable with biometrics. About two-thrids (64%) of consumers say they are excited about the potential of biometric verification methods like gait or walk assessments and fingerprint authorisation. Meanwhile, 62% feel safer using biometrics to verify a purchase than entering a pin, the study said.

Asia Pacific consumers are however concerned most about security. Nearly a third (27%) in APAC reported that they were victims of fraud in the last year, while 79% indicated they would be open to trying new payment technologies if they perceived them to be safe. Some 85% want to be sure the payment options the merchant offers are secure, the study noted.

As such, many consumers place trust in issuers and networks to provide tools that keep their financial information secure, with 45% agreeing that they would place their trust in their payment provider to follow security best practices, so they can be more hands-off.

On the flip side, the top reasons given for not trying new payment methods include security concerns (47%) and data protection concerns (42%).