The rapid rise in smartphone penetration across emerging economies and with technological advancements and COVID-19 crisis has increase Digital Payments.The demand for cashless payments, over cash, is being driven by greater convenience.
What is Digital payment
Digital payment is a way of payment, which is made through digital modes. In digital payments, the payer and payee both use digital modes to send and receive money. It is also called electronic payment. No hard cash is involved in digital payments.
According to the research data analyzed and published by Finnish website Sijoitusrahastot Digital Payments Market is expected to grow at a CAGR of 13.5% over the forecast period 2020 to 2025 as number of users is also set to increase by 10.1% YoY to reach 3.47 billion.
China will take the lead in digital payments, growing to $2.31 trillion, as well as in digital commerce, reaching $1.17 trillion in 2020. For Asia as a whole, digital payments will reach $2.88 trillion in 2020 as per a Statista report.
In china, WeChat Pay allows a customer to pay quickly through in-app service and connected banks and book hotels, flights, trains, and buy movie tickets and this is expected to increase, owing to the rising smartphone users and government pushing toward digital payment wallet services.
The number of users and transaction value of Chinese digital commerce surpassed that of the United States, owing to the Chinese digital payment service companies forming alliances across the world. WeChat and Alipay are few of the popular applications that the Chinese citizens use to pay for their expenses when they visit abroad.
Retail stores and services across the world are rapidly adopting and integrating mobile payment applications, such as PayPal, Samsung Pay, Apple Pay, AliPay, and WeChat Pay, to accept payments. Owing to changing lifestyles, daily commerce, and rapid growth in online retailing, this trend is expected to continue over the next six years.
Most countries are also trying to reduce their cost of printing the currencies and counter the fake currency influx that disturbs the economic growth, with digitization, thereby, creating an environment conducive for cashless and digital payments.
However, Contactless payment is an alternative payment channel. QR-code payment options and digital wallets are in the pipeline. These are set to bring mobile payments to the fore.
survey conducted by Mastercard – an American multinational financial services corporation – in April 2020 saw contactless card transactions grow twice as fast as non-contactless transactions globally between February and March 2020 due to concerns of possible transmissions of COVID-19 through physical contact.
The global payment industry is likely to continue growing as the use of cashless payments are expected to surge even post-COVID-19. In the period between 2020 and 2024, the global digital payments market is expected to grow at a 13.4% compound annual growth rate (CAGR) to reach US$8.17 trillion by 2024. – Dec 29, 2020