Across APAC, consumers are participating in a significant and rapid shift away from purchasing primarily with cash to instead relying on digital wallet systems like Apple Pay, Google Pay and GCash.
While digital wallets are nothing new (with Pismo crediting Coca-Cola with the first digital wallet in 1997), the rapid adoption of digital wallets as a primary, first-choice payment option is a fairly new phenomenon. Platforms like PayPal, Alipay and Africa’s M-Pesa have existed in the market since the early 2000s and held a generous market share.
However, nothing can compare to the rapid consumer adoption of digital wallets in the last decade. Digital wallet use in Malaysia is expected to account for 44% of all POS payments by 2027 and 41% of all retail payments in South Korea. Similarly, in Hong Kong, approximately 88% of all residents rely on mobile wallets to make payments online and in-store.
It's safe to say that digital wallets are here to stay.
Like any innovation in payment technology, digital wallets have set a benchmark on what is expected from both the digital wallet provider and the business offering these payment methods. Here are some examples of customer expectations for the future of digital wallets.
Customers expect to see Apple Pay, Google Pay, PayPal and Ali Pay alongside traditional payment methods such as Visa, MasterCard, American Express and so on. This expectation will only grow as digital wallets continue to capture more of APAC’s market share.
Open, cross-platform digital wallets allow users to make purchases wherever the wallet is accepted from whatever smart device they choose – from coffee shops to online stores, gyms, retail companies and beyond. As digital wallets grow more popular, cross-platform digital wallets will become the standard for many consumers.
Consumers using digital wallets backed by large tech companies like Apple Pay, Google Pay, and PayPal are aware of and accustomed to the rigorous security features offered by these wallets (such as biometric scanning for payment verification). As digital wallets become more popular, consumers will expect a higher level of security from their wallets.
Who remembers the days of ‘dad wallets’ bulging under the weight of a million faded paper receipts? The modern digital wallet consumer expects all receipts and invoices to be digitised and instantly available after making a purchase with their favourite digital wallet.