Mobile payment is worldwide on the rise. Allied Market Research predicts that the global market size will reach over $4.5 trillion by 2023. Analysts estimate the compound annual growth rate from 2017 to 2023 to be 33.8%.
However, there are huge differences around the world when it comes to adoption of mobile payments. A recent study by global consultancy PricewaterhouseCoopers found that globally, 34% of consumers paid for purchases using mobile payment in-store. The 2019 Global Consumer Insights Survey shows that mobile payment use is highest in Asia. Eight Asian countries are among the top ten countries for mobile payments in the world. Six of these are in Southeast Asia, namely Thailand, Vietnam, Indonesia, Singapore, the Philippines, and Malaysia.
Vietnam has seen the most drastic growth of mobile payment users, with a 24% increase within a year. 61% of Vietnamese people pay for transactions via smartphone. Meanwhile, the adoption rate in Thailand reaches 67%. Only China has a higher rate of mobile payment use. According to the survey, 86% of China residents pay for transactions with their smartphone.
iResearch estimates that China’s mobile payment market was worth $27.7 trillion in 2018. It has grown over 58% within a year. The Chinese WeChat Pay is the world’s largest mobile payment platform with over one billion active users. In comparison, U.S.-based PayPal and Apple Pay have 250 million and 383 million users respectively.
Mobile payment: One step closer to financial inclusion
The growing practice of paying without hard cash is also accelerating financial inclusion. According to the World Bank, having an account at a bank or mobile money provider is a crucial step in escaping poverty. The World Bank found that the increase in the use of mobile phones and the internet to conduct financial transactions has contributed to a rise in the share of bank account owners sending or receiving payments digitally. Between 2014 and 2017, the number of users rose globally from 67% to 76%, and in the developing world from 57% to 70%.
Indonesia, for example, has the fourth-largest unbanked population after China, India and Pakistan. But the number of bank account holders has been growing, from 36% in 2014 to 49% in 2018. One of the driving forces behind financial inclusion is companies like Indonesian ride-hailing service Gojek. Their drivers have to open a bank account to cash out their money from the digital account where they receive payment. Also, Gojek customers are encouraged to pay cashless. The company’s one million drivers are specially trained to convince customers to use a digital wallet.
Simultaneously, mobile payment adoption in Indonesia is also on the rise. According to PwC, the number of users rose from 38% in 2018 to 47% in 2019, making the country the fifth largest mobile payment society.