The Asia-Pacific region accounts for nearly two-thirds of global transactions. To successfully tap into this market, ecommerce leaders must look beyond cards and popular ewallets like Alipay and WeChat Pay. “Too often, merchants and retailers enter APAC thinking that offering card acceptance and a few ewallet brands will suffice,” says Joel Yarbrough, GM of APAC at Rapyd. As Rapyd’s Global Payments Guide explains, bank transfers, pay-later options, and cash preferences are three trends beyond ewallets that are shaping commerce across the region. Success in APAC means understanding these trends and the cultural differences that drive them.
The World’s Largest Middle Class Is Driving a Bank Transfer Boom
Bank transfers are already among the top ways that consumers in Indonesia, Thailand, and Malaysia pay online, and they are projected to increase in popularity across the region. According to the World Economic Forum, Asia’s middle class will balloon to 1.75 billion people in 2020, making up 15% of the world’s population. That’s five times the entire population of the United States. This is leading to a historic number of consumers opening bank accounts for the first time and suddenly finding themselves connected to the global economy like never before.
Across the region, these bank transfers are getting faster and faster as real-time payment schemes like PayNow, PromptPay, and DuitNow, sponsored by the banks and regulators, bring high-speed, high-convenience payments to banking.
Pay-later Preferences Are Disrupting Emerging and Developed Markets
Buy now, pay later (BNPL) options are growing in popularity across APAC by allowing shoppers to defer payments and access credit in an underserved market.
Companies like ride-hailing leader Grab, travel platform Traveloka, ecommerce marketplace Tokopedia, and giants like Alibaba and JD.com have all embraced BNPL as a way to expand service to both their buyers and merchants on their platforms. Pure plays like Kredivo and Hoolah have also entered the market.
The trend has exploded in even relatively well-served markets like Australia, where Afterpay, Zip Pay, and Splitit are taking market share from traditional credit card companies thanks to fast approvals. Gen Z and millennial shoppers are driving much of the uptake across APAC, and usage will likely increase as the oldest millennials enter their prime earning years and Gen Z continues to join the workforce.
Cash Is Still King, Even for eCommerce
Despite the popularity of digital payment methods, cash is not dead. As media outlets pour over cryptocurrencies and the ewallet boom in Asia, it can be easy to forget billions of consumers still want to pay in cash. More than 19% of ecommerce transactions in Vietnam are paid for with cash on delivery (COD), and across India, CODs account for around 60% of ecommerce orders. With large populations across the APAC region still unbanked, cash can’t be overlooked.
Global Commerce Leaders Must Think Locally in APAC
Meeting your customers’ local payment preferences across this region will enable you to attract more buyers, increase your conversion rate, and grow revenue. But the complexity and nuance can’t be understated. That’s why ecommerce companies looking to enter or expand in APAC need to leverage the expertise of a payment platform, such as Rapyd. Together, we can localize your payment options for each unique market.
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