After countries like China and India, where resident rely on mobile wallets in their day-to-day lives, ASEAN is slowly catching up. Cash remains the dominant transaction mechanism in most of Southeast Asia, with 70% of consumer payments still conducted through a physical exchange. However, with smartphone and mobile purchasing penetration in ASEAN already at 46% and 25%, respectively, payment transactions via mobile phone(s) are likely to increase. Additionally, gross transaction value of mobile payment is expected to rise to USD109bn over FY17-27F, implying a 25% increase over ten years.
Although we expect the adoption of mobile wallets/payments to accelerate in ASEAN, the difference in adoption rates between the ASEAN and China remains stark. However, we believe this is likely to change in the next ten years. It is estimated that current mobile payment penetration in ASEAN is only about 7%, and this is expected to increase to about 27%, or 167mn users, by 2027F. Similarly, as incomes grow, the average mobile payment value per capita could increase from USD282 to USD649 over this timeframe.
Part of the reason for ASEAN’s delay in adopting mobile wallets to date is the lack of acceptance, low banked and credit card penetration, and high regulatory barriers in most markets. However, there are multiple reasons why the operating environment is improving:
Regional leaders best positioned
We use a five-factor model to rank 38 different wallets in the region. Our proprietary analysis of 38 mobile wallets in the region is based on an assessment of five factors that we think are critical for success in the industry
Using this matrix, GoPay (Go-Jek), True Money (True/CP Group) and GrabPay (Grab) are best positioned in the region. Commonalities among these companies include a regional presence, strong investor backing and a large number of already developed use cases.
For more insight on ASEAN’s development of e-wallets, click here.
Internet and media sectors, China
Head of Internet Research, China
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