APAC leads global surge in digital wallet adoption

Digital wallets in Asia-Pacific outpace global usage, driven by ecosystem integration, financial inclusion, and technological innovation.

Digital wallet use is surging in Asia-Pacific, with almost 70% of consumers in China using WeChat Pay and over half of Indian consumers use PhonePe daily, according to Euromonitor International.

David Zhang, Insights Manager for Payments and Lending, said that digital wallet use in Asia-Pacific is notably higher than in other regions, with a major impetus coming from the integration with business ecosystems, strides in financial inclusion, and advances in digital technology.

Zhang explained, "There are three key factors driving the digital wallets adoption and growth in this region, namely, the expansion of the digital business ecosystem, financial inclusion, and digital innovation technology advancement."

He detailed how digital wallets are intricately linked with major companies in the region, enhancing both their reach and functionality. "For example, in retail e-commerce, we've seen Shopee Pay with Shopee and in the consumer electronics sector, that's Samsung Pay with Samsung Electronics," Zhang noted.

The integration of digital wallets into larger business ecosystems not only benefits consumer convenience but also bolsters the sales of core businesses. "Samsung Pay actually benefits the sales for Samsung Electronics, handphone sales," Zhang stated. Additionally, these ecosystems help reduce acquisition costs for digital wallets by funnelling customers from parent companies to the wallets, thereby increasing usage rates compared to standalone wallets.

Innovations such as virtual cards and enhanced security measures against scams and fraud have increased consumer trust in digital wallets. These improvements also enable merchants to adopt embedded finance solutions that facilitate credit card payments, further integrating digital wallets into everyday transactions.

"Digital wallets actually target the unbanked or underserved consumers and merchants for the incumbent banks," he said, suggesting that traditional banks are responding strategically by developing their own digital wallets or partnering with existing ones to counter the threat from Super apps. 

Zhang also touched on the comparative usage of digital wallets in APAC versus other regions, noting a higher daily usage rate in APAC. "For example, the Google Pay respondents in India, 50% of them use it daily, in contrast to 30% of them in the US use it daily," he compared.